Construction and Engineering Contract Variations
Construction contractor not paying variations? – Valuing and getting paid for construction variations are probably two of the biggest problems in subcontracting under most forms of construction and engineering contracts!
A variation (sometimes referred to as a variation instruction, variation order (VO) or change order), is an alteration to the scope of works in a construction contract in the form of an addition, substitution or omission from the original scope of works.
Almost all construction projects vary from the original design, scope and definition. Whether small or large, construction projects will inevitably depart from the original tender design, specifications and drawings.
The valuation of variations and there impact on the works are often the source of disagreement, which can ultimately lead to a breakdown in relationships and disputes.
Construction Contractor Not Paying Variations
If you have an urgent problem about getting paid for construction variations about which you need advice please call us now for Free Advice** on 01773 712116 or email: firstname.lastname@example.org
StreetwiseSubbie have expert Consultants throughout the UK, who have the expertise and experience to advise Specialist Contractors, Trade Contractors and Subcontractors on how to value and get paid for construction variations. That includes problems relating to construction subcontract variations and the valuation and payment of subcontract variations in construction and engineering contracts including JCT, NEC/3, NEC/4, MF/1, ACA, and all manner of bespoke contracts.
How To Get Paid For Construction Variations
Valuation and payment for construction variations are two of the biggest problems in subcontracting under most forms of construction and engineering contracts!
Specialist Subcontracting in construction and engineering can be a tough business and it’s no surprise that at some point you are going to face tough problems such as;
“How do I get paid for construction variations?”
“How to value construction variations?”
“What are my rights regarding construction variations?”
As Specialist SubContracting is all about entering into legally binding commercial contracts (with Contractors or Clients) that require you to undertake variations, you will be pleased to know that you can access a wealth of information on Streetwisesubbie.com to answer your questions about how to get paid for construction variations and the valuation of and payment for variations in construction and engineering subcontracts.
Getting paid for variations is the holy grail of contracting. It is by far the most common battleground for payment disputes, but least understood.
What is a Contract Variation?
A Variation is either an addition to, or reduction in, or any change to, the scope of work under the contract. It can also be a change to the scope in terms of substituting some of the work for something else. For example two internal staircases could be removed and substituted for one long external staircase. A variation also arises if there is a departure from any plans, drawings, or specifications contained in the contract.
The Effect of Variations In Construction Subcontracts
A Variation needs to be carefully assessed in terms of its impact on the programme or time for completion, rate of progress of the work, and last but not least changes to cost. Specialist Subcontractors often fail to consider these issues before agreeing to actually carry out the variation. This brings me to the first important point which few Subcontractors understand.
Are Subcontractors Obliged To Carry Out Variations?
Unless the contract provides for variations, you are not obliged to carry out any variations! Your contract will set out your scope of work which you have undertaken to complete for a set price. You are not obliged to carry out any variations that are outside the scope of your contract, unless those variations have been properly instructed in accordance with the terms of the contract.
Now we all know that Contractors will ask you to do additional work without allowing you to quote a price or get a signature or otherwise getting approval for the variation. And they often don’t comply with the terms of the contract themselves!
Those of you who refuse to do the additional work without signed approval, or without the Contractor following the contract’s proper procedures, are often threatened with the back-charged cost of the Contractor getting someone else to do it. You need to be careful about this but if the Contractor isn’t complying with the contract, it is a hollow, unsustainable threat.
At this stage it is definitely worth getting some professional advice before accepting or rejecting the direction for the variation work. Why not use the Ask Streetwise feature on this site to ask our team of expert Consultants for help if a construction contractor is not paying variations?
Or simply give us a call and speak directly to one of our expert Consultants for Free initial advice** on 01773 712116 or email: email@example.com. You will not be charged unless you decide to appoint one of our Consultants to act for you.
Refusing to carry out a variation is also not grounds for termination of your contract. Whilst many contracts require you to follow the reasonable directions of the Contractor, this applies to the work under the contract and does not extend to carrying out any and all additional work that the Contractor requires.
Most contracts will describe the process under which a variation may be requested, accepted, and approved.You need to read up on what this is, and hold the Contractor to it.
Procedures Relating To Subcontract Variations
All variations need to end up on paper. In other words they need to be properly recorded! As mentioned the contract will describe what documents and procedures are required for a valid variation to be approved under the contract. So know what they are and follow them.
If your contract is less formal and there is no specified procedure then get the request and approval on paper. This can be documented on your own Site Instruction Form, Site Diary, an email exchange, or even your own ‘Confirmation of Verbal Instruction’ form.
This kind of document can become valid contemporaneous evidence that additional work was requested and to which you agreed to carry out.
Claim for Contract Variations Every Month
One of the biggest mistakes made by many Subcontractors is holding off on claiming variations until the later stages of the job.
It is a mistake for the following reasons:
- The Contractor will conveniently have forgotten just how much additional work was carried out, and the shock of the additional cost will express itself in anger and non payment.
- If the matter goes to adjudication or other formal dispute resolution, it will affect the credibility of your case because the adjudicator will wonder why all this work was not claimed for through the course of the job.
- It may raise the question of whether the work was actually done.
- The longer you go without documenting all the additional work, the greater the likelihood you will lose, or forget all the details of the work and what you should be claiming.
So the lesson here is to claim for Variation work every single month in your normal monthly progress claim. Don’t be shy, and don’t dither. Do it. If you’re going to fight with the Contractor then do it early rather than at the end when you’re carrying the cost of all the additional work but have been paid none of it because you’ve been too timid.
Getting Paid For Variations Requires Strength and Discipline
Getting paid for variation work requires the strength to press your case against the Contractor, and the discipline to keep excellent documentation. But once you’ve done it once, it will get easier. You will get stronger and better at the paperwork, and better at knowing how to follow the contract’s requirements.
As Specialist Subcontracting is all about entering into legally binding commercial contracts (with Contractors or Clients) that require you to undertake variations, you will be pleased to know that you can access a wealth of information on Streetwisesubbie.com to answer your questions about how to get paid for construction variations and the valuation of and payment for variations in construction and engineering subcontracts.
Construction contractor not paying variations? – If you simply haven’t got time to look or have any other problem whatsoever relating to the valuation of variations or payment for construction and engineering variations and you can’t find what you are looking for, then why not use the free Ask Streetwise feature** on this site to ask our team of experts for help?
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** You will not be charged unless you have decided to appoint one of our expert Consultants to act for you. This free service is subject to our terms and conditions.