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Architect's instruction
Last edited 04 Oct 2022
Campaign for cash retentions reform.

Change order for construction contracts

Variations in construction contracts Alterations to existing buildings

Prime cost sum

Liquidated damages in construction contracts

Contents
C t ti t t
1 Introduction
2 Valuation of variations
3 Source of conflict
4 Extension of time
5 Conclusion
6 Related articles on Designing Buildings
7 External references
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Introduction
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In the construction industry, a variation (sometimes referred to as a variation instruction, variation order (VO) or change
order), is an alteration to the scope of works (in the form of an addition, substitution or omission) from the original scope of
works described in the contract. Almost all projects vary from the original design, scope or specification at some point during
the construction works.

Reasons for variations include; technological advancement, changes in the client's requirements, statutory changes or
enforcement, change in conditions, geological anomalies, non-availability of specified materials, or simply because of the
continued development of the design after the contract has been awarded. In large civil engineering projects variations can
be very significant, whereas on small building contracts they may be relatively minor. Biological Biomedical Sciences
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Variations might include: world-class experience in cutting edge-

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Alterations to the design.
Alterations to the quantities required.
Alterations to the quality requried. Learn More
Alterations to working conditions.
Alterations to the sequence of work.

Variations may also be deemed to occur if the contract documents do not properly describe the works actually required.

Variations may not (without the contractors consent): Featured articles and news
Change the fundamental nature of the works.
Omit work so that it can be carried out by another contractor. Steel architecture
Be instructed after practical completion.
Require the contractor to carry out work that was the subject of a prime cost sum.

In legal terms, a variation is an agreement supported by consideration (payment) to alter some terms of the contract. No
power to order variation is implied, and so there must be express terms in contracts which gives the power instruct
variations. In the absence of such express terms the contractor may reject instructions for variations without any legal
consequences.

Standard forms of contract generally make express provisions for the contract administrator (generally the architect or
engineer) to instruct variations. Such provisions enable the continued, smooth administration of the works without the need
for another contract.

Variation instructions must be clear as to what is and is not included, and may propose the method of valuation.

Valuation of variations

Variations may give rise to additions or deductions from the contract sum. The valuation of variations may include not just the
work which the variation instruction describes, but other expenses that may result from the variation, such as the impact on
other aspects of the works. Variations may also (but not necessarily) require adjustment of the completion date.

Variations may be valued by:

Agreement between the contractor and the client.

The cost consultant.
A variation quotation prepared by the contractor and accepted by the client.
By some other method agreed by the contractor and the client. A functional material or an aesthetic tool of
modernism?
Valuations of variations are often based on the rates and prices provided by the contractor in their tender, provided the work
is of a similar nature and carried out in similar conditions. This is true, even if it becomes apparent that the rates provided by
the contractor were higher or lower than otherwise available commercial rates. Heritage and mental health

The contractor's rates do not become reasonable or unreasonable by the execution of variations, as stipulated by the ruling
in the case of Henry Boot Construction Ltd v Alstom [1999].

If similar types of works to those instructed by a variation cannot be found in the drawings, specification or bills of quantities,
then fair valuation of the contractor's direct costs, overheads and profit is necessary.

However, NEC contracts do not value variations based on rates in the tender. Guidance on assessing compensation events
states:

'Assessment of compensation events as they affect Prices is based on their effect on Defined Cost plus the Fee. This is
different from some standard forms of contract where variations are valued using the rates and prices in the contract as a
basis. The reason for this policy is that no compensation event for which a quotation is required is due to the fault of the
Contractor or relates to a matter which is at his risk under the contract. It is therefore appropriate to reimburse the Contractor
his forecast additional costs (or actual costs if the work has already been done) arising from the compensation event.' People with mental-health problems are among
the least likely to visit historic sites.
In other words, the contractor can ignore their tender pricing and claim cost plus on variations. However, there may be
disagreements about items such as factory overheads and management which are very hard to evaluate. In addition, given
the complexity and length of the supply chain in major building works, getting forecast pricing from all the parties affected Kenya recycles plastic bottles into bricks
takes time, often beyond the date by which the contract administrator has to make the decision as to whether or not to stronger than concrete
instruct the variation.

They may then have to decide whether or not to proceed with a variation based on estimates from the cost consultant which
in due course get replaced by the actual cost. It has been argued that this practicality defeats the some of the rationale of the
NEC contracts in relation to cost control and decision making.

Source of conflict

Conflict can arise when work is not mentioned in the bills of quantities, drawings or specifications. In common law this
silence does not mean the contractor has an automatic right to claim for extra payment. The client is not bound to pay for
things that a reasonable contractor must have understood were to be done but which happen to be omitted from the bills of Checking in on Gjenge Makers, two years later.
quantities.

Where there are items that, whilst they are not expressly mentioned, are nonetheless required in order to complete the The UK Plastic Packaging Tax 2022
works, then the contractor should have included them in their price. The bills of quantities and specification do not
necessarily have to include 'every nail to be punched in'. For example, in fixing GRC faades it is necessary to have steel
supports, and a reasonably experienced contractor must make provision for this in the contract price. Unless expressly
excluded, such supports are not paid for as a variation.

Conflict can also arise when a sub-contractor qualifies that, for example, 'Supply & Fixing of Door is included' but 'Supply &
Fixing of Ironmongery is excluded'. A reasonable sub-contractor should foresee that a door cannot be fixed without hinges
which is a part of the ironmongery. So even if ironmongery is excluded, the sub-contractor cannot expect a variation for any
of the items required to fix the doors.
Also, under the pretext of variation, the contract administrator cannot change the nature of works. For example, if the
contract provides for secant pile shoring, they cannot ask for diaphragm wall shoring as it will entirely change the nature of
the work.

Further, if the contract administrator omits work from contractors scope, such an omission must be genuine: that is, the work
omitted must be omitted from the contract entirely, it cannot be used to take work away from the contractor to give it to
another (for example, see FIDIC Clause 51.1). Similarly, the contract administrator is not empowered to order variations to
help the contractor if the contract works are proving too difficult or expensive for them.

Extension of time

Many construction contracts allow the construction period to be extended where there are delays that are not the contractor's
fault. This is described as an extension of time (EOT).
What is it and how might it effect construction ?
Variations may (but do not necessarily) constitute relevant events that can merit an extension of time and so adjustment of
the completion date. See Extension of time for more information.
Recycled waste plastic in construction

Conclusion

Variations are often sources of dispute, either in valuing the variation, or agreeing whether part of the works constitute a
variation at all, and can cost a lot of time and money during the course of a contract. Whilst some variations are unavoidable,
it is wise to minimise potential variations and subsequent claims by ensuring that uncertainties are eliminated before
awarding the contract.

This can be done by:

Undertaking thorough site investigations and condition surveys.

Ensuring that the project brief is comprehensive and is supported by stakeholders.
Ensuring that legislative requirements are properly integrated into the project. Discussing issues from hierachies to quality.
Ensuring that risks are properly identified.
Ensuring that designs are properly coordinated before tender.
Ensuring the contract is unambiguous and explicit. APM Levelling the playing field
Ensuring the contractor's rates are clear.
Preparing concise drawings, bills of quantities and specifications, providing for all situations which are reasonably
foreseeable.

Related articles on Designing Buildings

Extension of time EOT in construction contracts

Architect's instruction
Campaign for cash retentions reform.
Change order for construction contracts
Women’s views on achieving success in the
Alterations to existing buildings
Prime cost sum profession.
Liquidated damages in construction contracts
Construction contract
Change control procedure for building design and construction Sustainable drainage to reduce flood risk and
Compensation event clean rivers.
Abortive work in building design and construction
Payment for extra work
Bill of quantities BOQ
Confirmation of verbal instruction
Scope of work
Dayworks in construction
How to prepare a claim for an extension of time
Contract sum
FIDIC
Loss and expense
Contract documents for construction
Relevant event
Fluctuations in construction contracts
Valuation As government review released.
Valuation of interim payments

Sustainable urban drainage systems on DB

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