9. “THE ENGINEER MAY…REQUIRE THE CONTRACTOR TO PROVIDE AN ESTIMATE OF THE COST OF THE MEASURES HE IS TAKING OR IS PROPOSING TO TAKE”. The purpose of this whole sub-clause is to give the engineer some measure of control over the additional work, etc., in view of the employer’s liability for costs. Unfortunately no effective sanction is provided for failure by the contractor to supply an estimate, apart from the largely theoretical right of forfeiture under cl. 63. If a negligently low estimate is furnished and as a result the engineer is dissuaded from making an alternative design change that in the event would have been cheaper than the measures proposed, the employer may have a right to compensation from the contractor—p. 396.
The engineer is not entitled to an estimate of the cost of measures already taken, although apparently the contractor may be entitled to payment for them—see N. 6 and 17. The engineer is entitled to interim accounts by cl. 52 (4).
An estimate of cost may be taken into account as some evidence of what is “reasonable” payment under sub-cl. (3). With his client’s authority the engineer may negotiate with the contractor a collateral agreement that the amount of the estimate shall constitute the compensation payable to the contractor whatever his actual costs.
10. “THE ENGINEER MAY…APPROVE IN WRITING SUCH MEASURES WITH OR WITHOUT MODIFICATION”. Note that the responsibility is on the contractor to propose in the first instance and, unless the engineer acts under this clause, decide on the measures to be taken to cope with the unforeseen difficulties—N. 8.
Under cl. 13 (2) the whole of the works are subject to the engineer’s approval, but not necessarily in writing. Obviously it is more likely to avoid arguments if the engineer puts his views in writing. If the contractor obtains the engineer’s approval, it will reduce the burden of proving in arbitration that the measures he has taken were reasonable. Oddly, there is no provision in this clause that the contractor automatically loses payment for work done contrary to the engineer’s requirements, but the engineer or an arbitrator may refuse such payment if they are satisfied that the work was unnecessary or unsatisfactory.
If the contractor refuses to carry out modifications required by the engineer, there may be forfeiture under cl. 63.
11. “THE ENGINEER MAY…GIVE WRITTEN INSTRUCTIONS”. Although subcl.(4) does not say so specifically, as it does in the case of any variation ordered, it is conceivable that the contractor may have a remedy under cl. 13 (3) for any delay or disruption due to an instruction, even though eventually it is decided that he has no claim under this clause. The engineer normally will be wise to act cautiously in giving instructions in a potential claim situation—see p. 75.
12. “THE ENGINEER MAY…ORDER A SUSPENSION UNDER CLAUSE 40”. A suspension order gives the contractor a number of rights—see p. 130. The contractor may be entitled to those rights for suspension, even though eventually it is decided that he is not entitled to a claim under this clause (although this is not said specifically in sub-cl.(4)). The engineer normally will be wise to act cautiously in giving a suspension order in a potential claim situation under this clause.
13. “THE ENGINEER MAY…ORDER A…VARIATION”, for which the contractor will be entitled to payment even though eventually it is decided that he is not entitled to claim under this clause. See sub-cl. (4) and, for dangers, p. 180.
The contractor, of course, is entitled to payment only if the variation order is valid, and the employer is entitled to challenge under cl. 66 the validity of an order. Generally the only case in which the engineer may validly give a variation order is to change the design of the works, for example where the difficulties make the original design unstable or where redesign will avoid or reduce the cost of the work causing the difficulty. A variation order is not appropriate merely because a contractor has found rock more difficult to excavate than could have been anticipated, for example—the contract work defined in cl. 8 (1) is not changed, and this is a pure cl. 12 (1) claim.
14. ARBITRATION BEFORE COMPLETION UNDER THIS SUB-CLAUSE—is dealt with in N. 22.
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