Cases - Construction Award No 2/6

Record details

Name

Construction Award No 2/6

Date

(1995)

Citation

2 Con

Keywords

Construction claims

Summary

The claimant contractors agreed to lay pipeline beneath a road for the local authority employer. The bill of quantities underestimated the quantity of deep tarmac, allowing a very high rate. The engineer sought to re-rate this item under clause 56(2) of the ICE Conditions of Contract (5th edition).

The arbitrator noted the consensus among commentators that the decision under this clause must exclude circumstances where the contractor might, as a result of an error gamble, make a substantial loss or gain as a result of an increase or decrease in the quantity of an item. However, it was held that the circumstances warranted a review of the rate. This was because the bill item was expressed as a 'small quantity' item, with sufficient clarity to enable an experienced contractor to recognise it as such; the conditions in fact encountered were continuous, or virtually so, for the whole length of the pipeline, requiring, or enabling, the contractor to employ techniques different from those which would have been required for the billed item and it was therefore the increase in quantity, of itself, that changed the nature of the work and the conditions under which it was executed.

In setting a new rate, the arbitrator related it as far as was practicable to the relevant bill rate.