The change is being valued at rates that don't fit
The variation is agreed, but they've priced it with rates that are nowhere near what the work actually involved.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Your main contractor accepts the change but values it at a rate from your priced document. That rate was for different work: different access, sequence, quantities, hours or conditions. Your daywork and resource records tell another part of the story.
Your subcontract may set an order of rules: its own rates, an adjusted rate, a new rate, a fair valuation or daywork. Which one applies depends on the subcontract and the work. Your actual costs help test their figure, but on their own they do not replace the subcontract's rule or prove what is due. Leave it and the change is paid at a rate that never fitted the work.
The solution
Fix the valuation rule first. Do your subcontract's rates apply because the work is similar in character and conditions? Do they need adjusting because the conditions changed? Or do they give way to a fair valuation or daywork? Then show from the diary, photographs and allocation sheets why that rule fits this change.
Variation Claim builds that position. Each adjustment is priced separately against the record that proves it, and the daywork is kept as a cross-check. Your main contractor gets a schedule it has to answer line by line. Unpaid Variation Prevention keeps the conditions of each change on file from the day it is instructed.
Example
Illustrative example. The scenario and figures are invented.
The facts
A groundworks subcontractor is told to dig a trench along the back of an occupied building, where the excavator cannot reach. The work is done by hand, with the spoil barrowed to a skip. The main contractor values it at the bill rate for bulk excavation: £7,200 for the 400 cubic metres.
What happens
- The subcontract's valuation rule is identified first. The bill rate applies to similar work in similar conditions. An adjusted rate applies where the conditions differ, and daywork only where measuring the work is not practical.
- A schedule with its sources sets out three treatments side by side, starting with the bill rate at £7,200.
- An adjusted rate is built from the bill rate's labour content, the hand dig, the barrow distance and the double handling. It gives £24,000, and every adjustment is tied to the diary, the photographs and the instruction.
- The daywork sheets show 620 hours and would give £31,000. They are kept as a cross-check, not as the claim.
- The schedule explains why the adjusted rate is the rule that fits the work. It keeps the instruction, the measure, the cost records and the time position separate.
The three treatments
| Treatment | Amount |
|---|---|
| Bill rate for bulk excavation | £7,200 |
| Adjusted rate | £24,000 |
| Daywork sheets, 620 hours | £31,000 |
| Agreed | £22,500 |
The outcome
The item is agreed at £22,500 in the next cycle. The daywork sheets stay on file in case the measure is questioned later.