Pricing and substantiating a variation
Work from an instruction to a traceable variation price, then check the records, omissions and assumptions before submitting it.
by Jack Butler-Kettle · 60–90 min course · About 18 min readShare
Your course at a glance
Start here: Anyone needing to prepare or check a straightforward change quotation. No prior estimating or contract knowledge is assumed; use a calculator and the supplied records.
Your finished output: Produce a traceable price for a simple instructed change, with scope, quantity, rate, omissions, evidence and outstanding questions clearly separated.
Plan for 60–90 minutes. The suggested activities total about 75 minutes: 5 to prepare, 42 for lessons and practice, 8 for the knowledge check and 20 for the final task. This is a planning estimate, not a timed or accredited course. Pause or repeat any stage.
You need a calculator and somewhere to write. All project facts and figures are fictional learning examples. Use them for the exercises; keep confidential project information out of these practice fields.
- Distinguish a scope change from original obligations or defect correction.
- Check authority and procedure before choosing a valuation basis.
- Calculate a net change without duplicate allowances.
- Prepare and track a submission with evidence and a separate time review.
For support with this work on a live project, see Variation pricing and compensation-event quotations for subcontractors.
Before you begin · 5 minutes
A site supervisor asks for extra work and signs a labour sheet. What does that establish, and what would you still need to check before pricing and submitting a variation?
An uncertain answer is a useful starting point. Keep it and compare your reasoning after the course.
0 of 6 lessons reviewed · 0 of 5 final checks ticked
Review ticks record your own progress. Written work is self-assessed against the model and criteria; it is not automatically marked.
Use Save progress to keep your writing and review ticks on this device.
Saved work stays in this browser’s storage; it does not sync between devices. Quiz selections are not saved. On a shared device, download your work and clear it here.
1. Learn and practise
Work through the lessons in order. Read the explanation, attempt the task without the model, then compare your reasoning. Correct your work before ticking the lesson. Expand one lesson at a time or keep several open.
1. Understand what changes and what stays in the original price
About 7 minutesA variation is a change dealt with under the applicable contract mechanism. The label alone does not create an entitlement to extra money. Begin with the original obligation: drawings, specification, quantities, qualifications and agreed scope boundaries. Then identify precisely what the revised requirement changes. Work already included in that obligation is not extra merely because it costs more than expected.
Separate added work, omitted work and substituted work. An addition introduces something; an omission removes something; a substitution may need both the removed and replacement elements valued. A defect correction is work needed to meet the original requirement. Its treatment differs from a genuine instruction to change that requirement.
An instruction, a quotation, an assessment, an agreement and a payment are different records. The person managing site work may not have authority to alter the commercial terms. A signed resource sheet may confirm attendance without agreeing who pays or the rate. Always ask what the document actually says and what authority applies.
Your first output is a scope comparison, not a number. If another reviewer cannot identify the before-and-after difference, they cannot test whether the price is complete or duplicates the original contract.
Your turn
Classify these three cases and explain the next check: replace a damaged door that did not meet the original specification; add two doors shown only on a revised drawing; replace specified doors with a different fire rating. Write a before-and-after description for the third case.
Compare your reasoning
The first is likely defect correction, subject to responsibility and the agreement. The second may be an addition, but check the original scope and authorised instruction. The third is a substitution: identify the original doors removed from the obligation and the new requirement, then value the net effect under the contract. A revised drawing alone may not establish the authority or procedure. Obtain the relevant instruction and preserve the revisions.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
2. Choose the valuation method before using a rate
About 7 minutesA rate is a price for a defined unit of work under stated conditions. A rate of £280 per door is meaningful only if the specification, included operations and conditions are understood. A quotation for supply only is not automatically a rate for complete installation. Identify labour, materials, plant, waste, delivery, access, attendance, overheads and profit where relevant, and state which are included.
Read the actual valuation rules. They may provide for existing rates, adjusted rates, a new build-up, quotations or recorded resource cost. This course does not impose one hierarchy on all contract forms. A change in quantity, access, sequence or working hours may make an otherwise familiar rate unsuitable.
For a new build-up, calculate the resources needed for one measured unit, price those resources and apply only the allowances permitted by the chosen basis. Show units: hours multiplied by cost per hour, or material quantity multiplied by cost per unit. A lump sum can still be supported by a transparent breakdown. Keep market quotations dated and record exclusions and validity.
Check whether the chosen rate already contains overheads and profit. Adding the same allowance again inflates the price. Check similarly for attendance and waste that may be priced elsewhere. The RICS guidance on valuing change provides wider practice guidance; the contract determines the applicable mechanism.
Your turn
A supply-and-install rate includes £100 material, £60 labour, £20 plant and attendance, plus a stated 10% allowance on those direct costs. Calculate the rate. A colleague proposes adding another 10% to the result “for overheads”. Explain your response and list two conditions that might make the rate unsuitable for a different job.
Compare your reasoning
Direct cost is £180. Ten per cent is £18, producing £198 per unit. Do not add another overhead allowance when it duplicates the stated inclusion. Check the actual purpose of each allowance and the contractual basis. Different specification, access, working hours, quantity or responsibility for attendance could require a different rate. A correct calculation does not prove the rate applies to different conditions.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
3. Establish the instruction, procedure and net scope
About 7 minutesIn the running exercise an authorised instruction adds 12 doors of the same specification and conditions as an existing priced item. A separate £160 making-good item is omitted. The contract is expressly assumed to permit the existing £280 door rate. These are scenario facts; on a real job you would need records establishing each one.
Create a change record with a unique reference, original drawing revision, revised drawing revision, instruction reference, date received and scope description. Add the person authorised to instruct and the procedure for responding. If a notice or quotation is required, record its trigger, deadline and service requirements from the actual agreement. Do not treat ongoing discussion as an automatic extension of time to comply.
Check interfaces. Does another package already include the same work? Does removal of the original item create an omitted value? Are design, testing, protection or making-good requirements affected? Record questions before committing to a price that appears complete.
If work must proceed while a price remains unresolved, keep the instruction, reservations where appropriate, resource records and contemporaneous facts. Obtain advice on the actual obligation to proceed; do not assume that an unresolved quotation always permits refusal or that compliance automatically agrees the price.
Your turn
Prepare a change-register entry for the 12-door instruction. Include the £160 omission and a separate status for the price. Add two questions you would ask if the doors were required at night rather than under the original working conditions.
Compare your reasoning
The entry should identify the added doors, original and revised scope, authorised instruction, existing-rate assumption and omitted making-good item. Price status starts as being prepared or submitted, not agreed. Night work raises questions about the valuation mechanism, labour premium, access, supervision, productivity and programme effects. Do not quietly use the original rate and also add unsupported premiums; establish what the rate includes and how the changed conditions are valued.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
4. Calculate the change and test the allowances
About 7 minutesTwelve doors multiplied by £280 gives £3,360. Deduct the £160 omitted item: net change £3,200. The rate is assumed to include the relevant labour, materials, overheads and profit. There are no additional attendance or tax adjustments in this example. Show the omission as a separate negative line so the reader can follow the net movement.
Use a quantity calculation beside each measured line. “Twelve doors” should connect to the marked-up revised drawing or schedule. Check whether units match the rate: a rate per opening cannot simply be multiplied by square metres. Check that revisions have not left a superseded line inside the total.
Run three checks. Arithmetic: do extensions and totals reconcile? Scope: are all added and omitted obligations included once? Basis: are rates and allowances permitted and evidenced? A spreadsheet formula can pass the first check while the submission fails the other two.
State exclusions and unresolved assumptions explicitly. For example, a time-related cost may require separate assessment; a provisional exclusion is not a conclusion that no time effect exists. Explain the commercial status so a reviewer knows whether the sum is a quotation, an assessment or an agreement.
Worked fictional example
The net change, including the omission Item Calculation Value Added doors 12 × £280 £3,360 Omitted making good Deduct once −£160 Net quotation £3,360 − £160 £3,200 Your turn
Calculate the original £3,200 price. Then revise the instruction to 15 doors and a £240 omission, keeping the £280 rate. Check a draft that adds 10% overhead and profit after deducting the omission. What should the revised submission show?
Compare your reasoning
Original: 12 × £280 − £160 = £3,200. Revised: 15 × £280 − £240 = £3,960. The extra 10% would duplicate an allowance already included in the assumed rate and should not be added on these facts. Show 15 doors at £280, the £240 negative line, the net £3,960, the rate source and revision. Retain the original quotation in the history but replace its current status.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
5. Build a submission that another person can verify
About 7 minutesAttach evidence because it proves a particular part of the submission, not merely because it exists. The original and revised scope show the change. The instruction supports the authority and requested work. Measurement shows the quantity. The pricing document or build-up supports the rate. The omission record supports the deduction. A notice and delivery record address procedure where required.
Give each attachment a stable reference and use it in the corresponding price row. For a new rate, include source quotations or resource calculations and explain assumptions. Keep original records separate from explanatory mark-ups. A reviewer should be able to move from the £3,200 total to each line and then to its source.
Record limits honestly. A signed daywork sheet may show people and hours without accepting a contractual entitlement or agreeing the charge. A photograph may show installed work but not its instruction date. A quote may exclude access equipment. Explain what is still needed rather than claiming every document proves everything.
Finish with a short cover statement identifying the instruction, net scope, valuation basis, net amount, exclusions and requested decision. Complete the contract’s submission requirements and preserve the issued pack. An organised pack supports assessment; it does not guarantee agreement.
Your turn
Build an attachment index with five records for the door example. Against each record state what it proves and one thing it does not prove. Then write a three-sentence cover statement for the revised £3,960 submission.
Compare your reasoning
A suitable index includes original/revised drawings, authorised instruction, marked measurement, rate source and omission record. Drawings show scope but may not prove authority; a rate source shows the price basis but needs matching conditions. The cover statement identifies the revised instruction, 15 doors less the £240 omission, and the existing all-inclusive £280 rate, giving £3,960. It records separate unresolved time effects if relevant and requests a stated commercial decision without calling the price agreed.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
6. Track agreement, payment and time effects separately
About 7 minutesA change can be instructed but unpriced, priced but unagreed, agreed but not assessed in a payment cycle, or assessed but unpaid. Keep separate fields for each state. One “complete” tick hides important differences. Record submission revisions, responses, agreed amounts, assessment references and receipts as applicable.
If an assessment differs from your submission, compare the changed quantity, rate or omission rather than simply repeating the total. Keep the parties’ positions and supporting evidence. Assign unresolved questions to an owner and review date. Do not overwrite an earlier submission or mark an item agreed because no reply has arrived.
Review time effects separately. Extra work does not automatically establish an extension of time or a recoverable prolongation cost. Record when the work was required, its effect on sequence and resources, the relevant programme evidence and applicable notice requirements. Obtain specialist input where the causal or contractual analysis is beyond the straightforward price exercise.
When transferring the item into a payment application or final account, use the change reference to check it appears once. Close the commercial item only when the agreed scope, value and any outstanding time or payment matters are accurately recorded.
Your turn
A £3,960 quotation is assessed at £3,700, with £3,000 received against that item. The work is complete but a time-effect query is unresolved. Write the register status and calculate the two differences. Explain why “complete and paid” would be misleading.
Compare your reasoning
Record submitted £3,960, assessed £3,700 and received £3,000, subject to confirmed allocation. The valuation difference is £260 and the assessment-to-receipt gap is £700. Completion of the physical work does not settle those differences or the time-effect query. Assign an action to each issue and retain the evidence. Check that the payment treatment follows the actual contract rather than treating this item-level ledger as a standalone legal payment entitlement.
If your answer differs, identify why, revisit the relevant explanation and correct your response. Equivalent wording is fine when the reasoning and checks are sound.
2. Check your understanding
Check your understanding
Allow 8 minutes. Close the lesson notes, answer each question and explain your choice to yourself. Read the feedback, revisit any weak point and try again. These checks support learning; they do not certify professional competence.
Answer notes
- £3,200. The addition is 12 × £280 = £3,360. Removing the £160 omitted item gives £3,200.
- Use the applicable inclusive rate and avoid counting the same components twice. The assumed contract permits the inclusive rate. A further percentage for the same components would duplicate them; any separate adjustment needs its own contractual and factual basis.
- No; submission, assessment, agreement and payment are distinct statuses. The register should record what has actually happened. Applying for an amount does not establish the other party’s agreement.
3. Complete the independent task
Allow 20 minutes. Use the new facts below to produce the finished output. Try it before opening the model response, then revise your work against every checking criterion.
Your project brief
Prepare a complete change quotation and tracking entry for a small partition package. All facts are fictional and values exclude VAT. Work independently before opening the model response.
- Original/revised scope
- An authorised instruction adds 18 m² of partition of the original specification and omits 4 m² of a separately priced lining.
- Valuation assumptions
- The exercise contract permits £65/m² for the partition and £22/m² for the omitted lining, under unchanged conditions. Both rates include relevant overheads and profit.
- Evidence available
- Instruction I12; original drawing A1; revised drawing A2; measurement M12; agreed rate schedule R1.
- Time review
- The supervisor says the work may affect the sequence; no programme analysis has been done.
- Later assessment
- Payer assesses £1,000. No payment has yet been allocated to this item.
Compare with the model response
Addition: 18 × £65 = £1,170. Omission: 4 × £22 = £88. Net quotation: £1,082. Do not add overheads and profit again. Link I12 to authority, A1/A2 to the scope difference, M12 to quantities and R1 to the assumed rate basis.
The cover submission should identify I12, the £1,082 net quotation and the stated rate conditions. Record the potential sequence effect for separate review; do not invent days or a time-related price. Check applicable procedures and programme evidence. Track £1,082 submitted and £1,000 assessed, with an £82 difference to investigate. “No payment allocated” is a record status, not enough on its own to establish an overdue debt.
A complete response asks which line explains the £82 and assigns someone to examine the time query, keeping any applicable deadlines visible.
Check your finished work
Tick a criterion only when your work demonstrates it. If a calculation, source or required check is missing, revisit the relevant lesson and revise the output before using the method on a project.
4. Review and use what you learned
Return to your starting response. Explain what you would now do differently and why. The aim is a reliable method you can repeat, including knowing when information or specialist review is needed.
- Tomorrow, explain the difference between an instruction, quotation, agreement and payment.
- In a week, rebuild the net-price calculation using 20 m² of partition instead of 18 m².
- On the next change, check scope, authority, procedure and valuation basis before opening the calculator.
Use the blank templates below to practise the record format. Their completed examples have their own stated facts; keep those figures separate from your independent course task.
Variation pricing worksheet
Measure the change against the original scope. Use positive quantities for additions and negative quantities for omissions; enter the agreed pricing basis.
Free blank template for your own project. The completed example is shown below. No email address required.
View the completed example
Completed fictional example
Westhaven refurbishment · 14 October 2026 · Version 1.0
Variation pricing worksheet
Scroll across if needed to read the whole record. A dash means no value has been entered.
| Item / instruction | Description | Quantity | Unit | Rate (£) | Net amount (£) | Source / status |
|---|---|---|---|---|---|---|
| CH-07 / I-07 | New partition | 80 | m² | £55.00 | £4,400.00 | Drawing P-104 D; rate build-up RB-07 |
| CH-07 / I-07 | Omit original partition | -40 | m² | £30.00 | -£1,200.00 | Baseline P-104 C; tender rate T-12 |
The example is £4,400 less £1,200 = £3,200 excluding VAT. It is submitted, not agreed; any time effect needs its own programme assessment.
This is a foundation for the defined task, not a professional qualification or a substitute for checking the actual contract and project. Use the sources and related resources below to continue learning.
Sources
- Valuing change. RICS.