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In many of my columns I describe requests for information from contractors as to whether an instruction by the engineer is a variation. This month let’s look at the circumstances included in the standard conditions of contract, NZS 3910:2003, which describe what constitutes a variation in broad terms. The contract documents may attempt to modify what is or isn’t a variation. A variation to the contract works is stated in the standard or could be any other matter which is said to be variation or is to be treated as if it was a variation by the contract documents. There are many circumstances during a contract that may be considered a variation. The standard includes the following circumstances that are to be treated as a variation: • A change in the quantity of an individual item.
• The late issue of instructions, documents or drawings by the engineer.
• The loss or damage to the contract works arising from excepted risks.
• The locating, altering, protecting, offsetting or reinstating a utility not indicated or is not substantially in the position indicated in the contract documents.
• Protection and complying with the engineer’s directions for the treatment of treasures (Maori artefacts and the like) if not otherwise provided for in the contract documents.
• Late supply of documents or materials by the principal.
• Failure by the engineer to properly carry out his or her duties as required by the contract documents.
• Inspection, recording, measuring and testing ordered by the engineer, not provided for in the contract documents, which comply with the requirements of the contract documents.
• Failure by the engineer to carry out inspection when requested that causes delays and costs.
• The engineer requests works to be opened up for inspection, if the works comply with the contract document.
• Failure by the engineer to issue practical completion certificate or defects liability certificate and costs incurred.
• Works suspended by the engineer.
The engineer may order variations in accordance with the standard that increases or decreases the quantity of work to be done; removes work from the contract; requires additional work to be done or changes the character or quality of any material or work. A change of the level, line, position or dimensions of any part of the contract works is also considered a variation. Further variations permitted by the standard include: • The engineer directing or changing the order that the work is carried out.
• Unforeseen physical conditions.
• Occupancy of the works by the principal causing delay or costs not otherwise provided for in the contract documents.
• Defects found by the contractor that the contractor is not liable for during the defects liability period.
• Cost fluctuations from statute, regulation, bylaw, or royalties fees, or tolls imposed by government or local authority.
• Work directed by the engineer covered as provisional sums, prime cost sums and contingency sums in the contract documents.
As can be seen from the above list there is considerable responsibility on the engineer and principal to manage the contract from the initial site investigations through to completion of the works. It is the engineer’s responsibility to carry out investigations and prepare the design and contract documents so that variations are minimised. It is also the engineer’s responsibility to administer the contract as described in the contract documents. A recent case where advice has been provided was when artefacts were found on a site. The delay that this circumstance has caused to the contract, through to reordering the sequence of the works and inadequate investigations before the design is completed and the contract awarded, was a variation. In other recent cases (two), the certificate of practical completion had not been issued on time, due to failure to inspect the works when requested. This too is a variation. The important point here is that all parties to the contract have a responsibility to ensure the project is completed to budget and on time.
BY MALCOLM ABERNETHEY, technical advisor, New Zealand Contractors' Federation
Contractor Vol.31 No.4 May 2007 All articles on this website are copyright to Contrafed Publishing Co. Ltd. |