On a re measurable contract, our estimator failed to properly sum (=SUM(XX)) his rates on the BoQ and subsequently provided a price circa 10% less than what it should have been, an order was then instructed on that value. Despite providing immediate notice of this error, the main contractor insists that we have given them a 10% discount which is reflected in our interim valuations. Of course it was only our bottom line figure that was incorrect, the rates x the remeasured quants will still equal our entitlement yet they persist to apply the discount. Are they allowed to do this?
The contract is JCT Standard Building Contract 2016 w/ Quantities. Could anyone provide insight/direct me to the relevant clauses on this matter?
Many thanks.
The starting point will be clause 4.2 which states (amongst other things) that ‘any error in the computation of the Contract Sum is accepted by the Parties’. Accordingly, you are, unfortunately, stuck with it.
It is, however, a little more complicated than that.
Firstly, the SBC is not a remeasurable contract, although the Bill of Quantities may contain items that are remeasurable and these will be identified as Approximate Quantities.
The valuation of those Approximate Quantities is by remeasure at the stated rate. The valuation of Variation is also by measurement at a rate in the BoQ (provided there is one).
For remeasurement of Approximate Quantities and for valuation of Variation, you would use the rates in the BoQ. But for assessing the payment and the final account, you need to start with the Contract Sum (which is 10% less than it should be).
If you refer to clause 4.3, it lists those adjustments made to the Contract Sum in assessing the final account. You can see that, largely, it is only adjusted by Variations and by remeasurement of Approximate Quantities (along with some other adjustments). Accordingly, the Main Contractor is mostly correct, albeit he should not be making a 10% adjustment to any Variations valued at BoQ rates.