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FIDIC Yellow Book - Clause 13.3 is Cost used to value a variation?

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The second last paragraph of Clause 13.3 of the FIDIC Yellow Book states that the Engineer may ask the Contractor to comply with "...any requirements for the recording of Costs" when he requests a Variation to be executed.

By not mentioning any such requirement for the recording of Costs in his instruction (i.e. not even confirming that recording is not required) is the Engineer entitled to consider that the variation can be assessed using something other than the defined term of Cost?  Specifically, a definition of cost which excludes the Contractor's overheads as set out in the Appendix to Tender as a percentage?  The Engineer recognises the profit element however as that is specifically mentioned in the last paragraph of Clause 13.3.

(Clause 1.1.4.3 for definition of Cost is unamended.)
asked Aug 4 in Plant and Design-Build Contract (Yellow Book) by anonymous   1 4
   

1 Answer

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The simple answer is no. The opportunity in 13.3 is for the Engineer to require the contractor to separate out the cost incurred in relation to the variation works. The underlying entitlement is still Cost as defined at 1.1.4.3. If no requirement is given then the Cost associated with the variation is not separated out or dealt with any differently to other project Cost.
answered Dec 1 by Rob Horne (9,570 points)