Page 226 - Civil Engineering Project Management, Fourth Edition

17
Variations and claims

17.1 Who deals with variations and claims

The two parties immediately concerned with the issue of variation orders
and the handling of contractor’s claims are the engineer under the contract,
and the resident engineer. While on overseas sites the resident engineer may
have powers delegated to him to agree payments and to value variations (see
Sec-tion 9.2) this would rarely be the case in the UK and, under ICE conditions,
he cannot be delegated powers to settle the contractor’s claims for delay or the
cost of meeting unforeseen conditions in accordance with Clause 12(6). Also only
the engineer has authority to issue the final certificate for payment, which of
course, can include revision of any payments previously certified in the interim
payment certificates.
In practice the resident engineer conducts the ‘first stage’ negotiation work
on payment matters, digging out and recording all the relevant information,
examining and checking the contractor’s claims or justification of new rates
he wants for varied work, and endeavouring to reach agreement with the con-
tractor on what a fair rate should be under the terms of the contract. He reports
all this to the engineer. If the resident engineer can get the contractor’s agree-
ment to a payment, which the engineer approves, this has the advantage that
the contractor can have confidence that agreements he reaches with the resi-
dent engineer will not later be overturned.
The employer should normally be kept regularly informed of the progress
and state of the contract. This information will include: major variations that the
engineer has had to make; whether many claims have been put in by the con-
tractor and what substance there is to them; and what the likely effect on the
total cost of the contract will be. The employer may require to be consulted on
any claim so that he can give his views on it before the engineer comes to a
decision. Some contracts, such as the FIDIC 4th edition, specifically require
the engineer to consult with the employer as well as the contractor before