How is a variation valued in a construction contract?
By the valuation rules in your subcontract, which usually start from your contract rates and move on to adjusted rates, fair rates or daywork.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
So read those rules first. They may point to an existing rate, an adjusted rate, a new rate, a fair valuation, daywork or another method. Then check whether the changed work, and the conditions it is done in, are like the work you priced. Work out the quantities, the resources and the preliminaries, your site running costs. Keep any separate question of time or disruption out of the valuation. What the work actually cost you is not a substitute for the method your subcontract sets. Trace every figure to the instruction, the measurements, your records and your assumptions. Where the wording or the facts are uncertain, show the alternatives. A valuation sets out the evidence; it does not on its own make an unsupported rate payable.
Example
Illustrative example. The scenario and figures are invented.
The facts
A flooring subcontractor's priced bill has a daytime vinyl-laying rate for empty rooms. An instruction adds an area in occupied wards that needs night work and broken shifts, and the added work has to be valued.
What happens
- The subcontractor compares the original conditions with the changed work.
- It measures the quantity and traces any extra supervision or plant to its records.
- It reads the subcontract to see whether it calls for an adjusted or different valuation, which turns on the wording and the evidence.
- It keeps any programme question, and the question of what is owed, separate from the cost comparison.
The outcome
The valuation rests on a measured quantity, a stated comparison of conditions and records of the extra supervision or plant. The subcontract's wording decides whether the bill rate is adjusted or replaced.
To have each variation valued on the basis your subcontract requires and pressed to agreement, see our Variation Claim service.