Variations

Question 1

What is a Variation? What does it impact?

Answer 1

A change in:

• The scope of works as outlined by the contract documents
• A dimension or level of the works
• The material, workmanship or quality of any part of the works
• A detail of the works
• The order of precedence of the contract documents

Impacts:

• The time – may affect the program
• The cost – may affect the cost of building works
• The quality – may affect the quality of the product

Question 2

Describe the process by which a variation and its effects are recorded & managed under the ABIC contract?

Answer 2

A variation is communicated and managed through written correspondence

• The architect may instruct variations
• The contractor may review the instruction
  
  • ​IF no adjustment to contract price and/or pc date the contractor must carry out the instruction
  • IF instruction results in adjustment of contract price and/or pc date the contractor must notify the architect
• The architect to instruct whether the variation is to proceed
• The contractor proceeds based on the written instruction from the architect
• Adjustment to the contract (contract price & date for PC)

Question 3

Client requested variations after PC, not included in contract. What now?

Answer 3

• The contract only allows for variations to the works prior to PC
• The architect could instruct the builder to provide a variation price request but the contractor is not obliged to fulfil their request.

Question 4

How can the client be protected from site related claims?

Answer 4

• Have the contractor produce a dilapidation report on the existing site / building & surrounds.
• This needs to be called up on the specification
• This could involve the architect, the consultants & any 3rd parties.

Question 5

If there are Errors or omissions on docs, what happens?

Answer 5

• Check drawings, check responsibility, issue variation, inform client.
• Architect to resolve error, omission or discrepancy by giving contractor written instruction and a copy to the owner.
• If it is the architect’s fault client must pay and then other arrangements can be made between the client and arch outside contract.
• Check if critical-path, may need to issue variation and work out cost adjustments after work is complete.

Question 6

Who is responsible for a dilapidation Report?

Answer 6

• The contractor should undertake the dilapidation report, but the architect should review to ensure it is satisfied sufficient documentation has been undertaken.
• Where there are any existing site conditions on neighboring properties that may be affected by the construction, a dilapidation survey / report should be undertaken to protect the owner and contractor from potential future claims

Question 7

Does a variation always cause an adjustment to the contract? Explain.

Answer 7

Every variation is a change to the contract (but not necessarily a change to cost or time)

Question 8

Under the ABIC contract what is the difference between the term “variation” and a claim by the contractor to “adjust the contract”?

Answer 8

• A variation does not necessarily result in the contract being adjusted, it is just a change to the scope of works and/or the contract documents
• It may not trigger the necessity for the contract price to be adjusted nor may it affect the program

Question 9

What is the contractor entitled to if there is a change to the contract price ?

Answer 9

Item 31 of Schedule 1 nominates an percentage of the value of the change which the contractor is entitled to. This is a percentage for the contractor’s overheads and profit (15% default).