2022-03-27（194）Engineering law and the ICE Contracts

The effects of a bulk addition or omission can be settled definitely by adding after it in the bill that it is a lump sum item and to be dealt with in accordance with section 6 of the C.E.S.M.M. It is, of course, open to the employer to exclude the method and to state in the tender documents that any bulk addition or deduction by the contractor will be adjusted for variations alone or both variations and changes in quantities, or for the contractor to tender specifically on the terms that all his rates or the rates in a particular section of the bill are to be taken to have been altered by a percentage as illustrated above. The Department of Transport allows for a “balancing item” in the bill, and alters cl. 56 to specify that the rates and prices in the bill other than those “in respect of any Preliminaries Prime Cost Items (together with their associated items for attendance and profit) and Dayworks” when “used for valuing work in accordance with cls. 52 or 56“are to be adjusted by an appropriate addition or deduction “in proportion that the sum against the balancing item bears to the Tender Total before the addition or deduction of the balancing item and less the above amounts”.

If the contractor makes a deduction in a pure lump sum or quantities contract the original contract work is paid for at the net price shown in the tender. Unless otherwise stated it does not seem that any percentage alterations should be made in the rates for extra work (or increases in quantities) since in this case the mere fact that the contractor makes a deduction for the original contract work does not imply that he is agreeing to a similar deduction for extra work the extent of which he does not know in advance. Where work is omitted, the net price only, after percentage adjustment for the deduction by the contractor, should be subtracted from the lump sum price. Where work is substituted, no percentage adjustment need to be made since adjustments of the omitted work and of the new work (which would only be adjusted up to the value of the omitted work) would cancel themselves out.

Bulk deductions and additions in the bill made initially or after tender to correct mistakes give trouble constantly and create surprises where the quantities of the works change substantially or there are major variations. It is important for both parties to consider the implications of the system for adjustment agreed to, and except where the C.E.S.M.M. adjustment item is adopted without change the intention should be defined in detail by a special term in the contract or endorsement on the bill signed on behalf of both parties, rather than leaving the result to any of the above disputable principles.

7. UNBALANCED BIDS. The comparison by the engineer of the detailed pricing of tenders is a safeguard against an unbalanced bid, where the contractor prices some work high and other work low (e.g. rock and earth in foundations) in the belief that variations or increases in quantities will mean more of the high-priced and less of the low-priced work than estimated in the bill. Obviously such a bid should not be accepted unless it is certain that the contractor’s gamble is wrong, and there may be general doubts as to the integrity of the contractor who makes it. See also pp. 184–9 and 211. Under the I.C.E. 5th edition comparison of rates is the only way of evaluating tenders, since there is no initial contract price, and it is quite misleading to an employer to compare tenders under a remeasurement contract by reference to the tender total (N. 4, p. 12).

For unbalanced method-related charges refer to pp. 219–20.

8. TIME FOR COMPLETION. If no completion time is filled in to the Appendix, unless there is a case for rectification (p. 41 (a)) the contractor has a reasonable time in which to complete the work, and any liquidated damages clause for delay is void since there is no date from which to calculate the damages.