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_Preparation_and_Evaluation_of_Variations_1740989739

The document outlines the process of identifying, preparing, and evaluating variations in construction contracts, emphasizing the roles of the Contractor, Engineer, and Employer. Variations can change the contract sum and must be approved by the Engineer and the consultant QS before being added to the interim bill. Various methods for valuing variations are discussed, including using existing rates, developing pro rata rates, or creating new rates, along with necessary documentation for approval.

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12 views9 pages

_Preparation_and_Evaluation_of_Variations_1740989739

The document outlines the process of identifying, preparing, and evaluating variations in construction contracts, emphasizing the roles of the Contractor, Engineer, and Employer. Variations can change the contract sum and must be approved by the Engineer and the consultant QS before being added to the interim bill. Various methods for valuing variations are discussed, including using existing rates, developing pro rata rates, or creating new rates, along with necessary documentation for approval.

Uploaded by

ShakaaLevi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PREPARATION AND EVALUATION OF VARIATIONS

Variation can be identified as any change to the scope of the work. Changes which are made to
the original contract by the contractor according to the acceptance and instructions of the
Engineer.

Variation can be initiating by “Employer” or “The Engineer”, Until the Engineer instructed or
approved the variation, Contractor will not make any modification to the work as a variation,
based on the verbal instructions given by the Engineer, Contractor can prepare the variation
proposal. However, in order to that, Contractor shall obtain the signature for the log notes or
records from the instructed party.

First Contractor should identify and clarify the type of variation and instructions given by the
Engineer to carry out the work. After receiving the cost proposals by the Contractor, the Engineer
will approve the rates.

First Contractor should identify and clarify the type of variation and instructions given by the
Engineer to carry out the work. After receiving the cost proposals from the Contractor, the
Engineer will approve the rates.
The variation claim amount can increase the contract sum or decrease the contract sum. Before being added
to the interim bill, the cost for variation work should be approved by the consultant QS. New rate breakdowns
will be prepared by the contractor except where there is the same item stipulated in the BOQ. The process of
evaluating variations involves a series of flowing procedures (according to contractors’ perspectives)

It is important to note that under CIDA/SBD/02, the Engineer has the right to refuse any proposed variation.
If the Contractor disagrees with the Engineer's decision, they may refer the matter to dispute resolution
following the contract. For a variation to notify the client or Engineer following documents should include
by Contractor.

✓ Variation order
✓ Drawings
✓ Measurement sheets
✓ Rate breakdowns
✓ Quotations
✓ CVI

There are several ways to do the valuation of the variations, they can be identified as follows.

❖ Using an existing rate in BoQ – If the variation about changes the quantity of the work, it will be
valued with the available rate in the BoQ
❖ Develop a Pro Rata rate – Generally if the variations about changing the dimensions are priced with
pro rata rates, it is a rate which is developed by using available rate as the base.
❖ Develop a new rate – If the work described in the variation is not compatible with any available work
item, then a new rate has to be developed to price the variation with new rate breakdown comprising
material cost, plant and equipment cost, labor cost, and overheads and profits. Sometimes plant and
equipment cost is taken as a percentage of labor cost. If the Consultant has requested for a variation
proposal, then the rate should be included in it as the variation evaluation proposal together with
quotations.

Before approving the variation, the Engineer must consider factors like time taken for variation, cost of the
work, project program because of allocating of resources for the variation procedure and to decide about the
time extensions for the procedure likewise. Claiming of variation can be dependent on the company generally
it includes in the monthly interim bill with the work items or separately.

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