Change Procedure & Valuing Change

Question 1

What are variations?

Answer 1

Alterations or modifications to the design, quality or quantity of the contract works, to the site access or working conditions

Question 2

Why might variations arise?

Answer 2

A variance between the needs of the employer, and the scope of the contract

Question 3

What form must architects instructions take?

Answer 3

• They must be in writing
• The QS cannot make additions to the contract sum for AIs that are not written

Question 4

How should a contractor deal with an oral arcitect instructions?

Answer 4

• The contractor has 7 days to write to the architect asking for the AI to be confirmed
• If the architect does not respond in a further 7 days it is taken as being an AI

Question 5

Can the contractor object to a variation?

Answer 5

They can make ‘reasonable’ objections in writing for variations relating to those described in 5.1.2 (working conditions / access / working hours etc)

Question 6

How soon does a contractor have to comply with an architects instruction?

Answer 6

Forthwith - without delay

As soon as possible

Question 7

What can the architect do if a contractor doesnt comply with a variation?

Answer 7

• He can issue a compliance notice
• If there is still no action by the contractor within 7 days, others can be employed to carry out that work and the additional cost charged to the contractor

Question 8

What 3 methods are there of obtaining a cost for variations?

Answer 8

• Agreement between the employer and contractor
• A schedule 2 quotation
• Valuation by the QS under the valuation rules

Question 9

What are the time periods for Schedule 2 quotations?

Answer 9

• The architect should request one in the AI
• The contractor has 7 days to notify that they will not provide one
• If not, they have 21 days to provide the quotation
• The architect then has 7 days to confirm in writing the acceptance or rejection
• The acceptance is called the ‘confirmed acceptance’

Question 10

What costs does the quotation contain when quoting a variation?

Answer 10

• Value of the work
• Any adjustment of time
• Money in lieu of direct loss and expense
• The fair and reasonable cost of preparing the quotation

Question 11

What costs is the contractor entitled to if the quote for a variation is rejected?

Answer 11

The fair and reasonable cost of preparing the quote, as long as the quote itself was fair

Question 12

What are the valuation rules?

Answer 12

There are three rules for measurable work:
* If it is of a similar character, quantity and in the same conditions as existing work, then the bill rates should be used
* If it is of a similar character, but different quantity or conditions, the bill rates should be used as a basis but a fair allowance should be made to take account of the difference
* If it is not of a similar character, fair rates and prices should be used

Question 13

How are non-measurable work valued?

Answer 13

Should be valued by dayworks

Question 14

What is a star rate?

Answer 14

A rate that is based on the bill rates but includes a fair allowance

Question 15

What are ‘fair rates and prices’?

Answer 15

A market rate, or price based on actual costs, on in line with current cost data e.g. SPONS

Question 16

What is dayworks?

Answer 16

The prime (actual) cost of all the materials, labour and plant used in carrying out the work, along with the % additions to each category as set out in the contract

Question 17

What document should the prime cost be calculated in accordance with?

Answer 17

Should be calculated in accordance with the ‘Definition of the Prime Cost of daywork carried out under Building Contracts’ published by the RICS

Question 18

What information is necessary to be able to assess dayworks?

Answer 18

• Vouchers showing the amount of time spent on each activity (dayworks sheets)
• Names of the workmen
• Plant used
• This information should be given to the architect at the end of the week following that in which the work was carried out for verification

Question 19

Can the QS alter hours which he considers to be excessive on a dayworks sheet that is authorised by the architect?

Answer 19

No

Question 20

What would you do if the contractor submitted 10 dayworks sheets to you for payment?

Answer 20

• Verify with the architect that a relevant variations has occurred and is on an AI
• Ensure there is no other contractual method of valuing the variation
• Verify the hours and materials are correct and authorised by the architect

Question 21

Regarding a valuation if you and the contractor’s QS could not agree on something how would you resolve it?

Answer 21

• Discuss with partner and client to try and seek a resolution with the contractor
• Your valuation stands for the purposes of payment
• The contractor could take the dispute to adjudication if necessary but should try and resolve so it doesn’t come to this

Question 22

Give an example of where quantum meruit might be used

Answer 22

If the employer and contractor come to a separate agreement on acceleration, the costs of this may be based on a ‘fair and reasonable’ basis

Question 23

When dealing with variations/changes what happens if client/contractor do not reach an agreement regarding cost?

Answer 23

The clients QS valuation will be imposed

if the contractor still disagrees then they would have to take it D.R.

Question 24

What 3 methods are there of obtaining a cost for variations?

Answer 24

Agreement between the employer and contractor
A schedule 2 quotation
Valuation by the QS under the valuation rules

Question 25

When quoting for a variations, what costs does the quotation contain?

Answer 25

• Value of the work
• Any adjustment of time
• Money in lieu of direct loss and expense
• The fair and reasonable cost of preparing the quotation

Question 26

When quoting for variations what costs is the contractor entitled to if the quote is rejected?

Answer 26

The fair and reasonable cost of preparing the quote, as long as the quote itself was fair

Question 27

What is a star rate?

Answer 27

A rate that is based on the bill rates but includes a fair allowance

Question 28

What are ‘fair rates and prices’?

Answer 28

A market rate, or price based on actual costs, on in line with current cost data e.g. SPONS