Variations (Section 5)

Question 1

What does the term variation mean?

Answer 1

A variation in the JCT SBC is either from a change of specification, an omission/addition of work or expending provisional sums.

The term variation means: ““the alteration or modification of the design, quality or quantity of the Works, including:

1. ) The addition, omission or substitution of any work
2. ) The alteration of the kind or standard of any of the materials or goods to be used in the Works
3. ) The removal from the site of any work executed or Site Materials other than work, materials or goods which are not in accordance with this Contract.

Question 2

How is change dealt with in NEC?

Answer 2

Compensation event - deals with both time and cost.

Question 3

What are the time frames for compensation events in NEC?

Answer 3

The contractor is required to notify a compensation event within 8 weeks of ‘becoming aware that the event has happened’. The PM must respond to the contractor within 1 week after their notification of the compensation event. If the PM fails to respond within the time allowed, the contractor may notify the PM of that failure. If the failure continues for a further 2 weeks after the contractors notification then it is treated as accepted by the PM that the event is a CE.

Question 4

How are variations priced within the JCT SBC?

Answer 4

Valuation rules:

bill rates, work of a similar condition and nature, fair and reasonable rates, dayworks

Question 5

What is a variation quotation?

Answer 5

A quotation produced by the contractor for a variation

Question 6

What are the time frames for a variation quotation?

Answer 6

From receipt of information the contractor has 7 days to accept/reject quotation request, 21 days from receiving all relevant information from the EA to provide the quotation. The EA then has 7 days to accept/reject.

Question 7

How are dayworks priced?

Answer 7

Two options:
Option A - percentage addition (prime cost to which a % is added for OH&P)
Option B - All inclusive (quoted at tender and in contract docs)

Question 8

What are the issues associated with pricing using dayworks?

Answer 8

1. ) Dayworks are not competitively priced, where as the rates included within the BoQ are market tested. Therefore one issue is that it’s unclear whether the rate paid for dayworks is competitive.
2. ) The contractor doesn’t need to work to an output rate, i.e. if they are unproductive the risk of increased cost sits with the client.

Question 9

What other allowances are made to variations on top of the measured works?

Answer 9

OH&P, can include insurances and D&B contingency