Instructions, Variations & Quotations Flashcards
What are variations
Additions, omissions and substitutions enacted through an instruction
Priced by measuring changed work then applying existing rates and prices from the contractors tender
What are changes
Changes to scope, key dates and completion date
How does NEC4 approach claims
NEC4 does not have claims (retrospective recovery of loss and expense)
CE’s are used instead, most of which try to avoid a problem or minimise it’s impact, thereby minimising dispute likelihood
Three traditional contract processes
Variations/changes
EoT’s
Loss and expense
NEC4 combines 2 & 3 into compensation events
What are CE’s
No contractual definition
An event which is the clients risk, and if it occurs, affects the contractor, entitles the contractor to be compensated for any effect on the Prices, and the Key Dates and the Completion Date
They are listed in the contract (29 maximum dependent on secondary options)
How does change quantification differ between NEC4 and traditional contracts
Trad. - variation priced on account to be settled at final account (can lead to more disputes and loss of control given time period between FA and variation occurrence(s))
NEC4 - CE’s assessed as they happen, including continual assessment of the Prices, delay costs, disruption costs and delays to Key Dates and Completion
Example CE’s
Scope change
Client does not provide something on time
Searching for absent defect
How are CE notifications addressed in NEC4
PM notifies Contractor when they create a CE
Contractor to notify PM of CE if the contractor believes the event is a CE and the PM has not already informed them
How are quotations addressed in NEC4
Contractor can be instructed by PM to prepare quotations for several way to deal with a CE
PM selects most advantageous to the client in terms of time and money
Quotations are offers that are accepted or rejected
