Page 227 - Civil Engineering Project Management, Fourth Edition

Variations and claims
207
reaching a decision on a claim. But irrespective of whether such requirements
exist, the engineer should always report major claims to the employer and allow
both parties to put their views to him.
On very large projects where an ordered variation may incur heavy extra
expenditure, it is advisable that the employer is involved in the issue of any
order which incurs significant extra cost and many contracts stipulate this. On
many such projects, including the Mangla project mentioned in Section 5.6,
the engineer will report any proposed major variation to the employer for his
agreement, with a technical report in justification. Variation orders can then be
issued in two parts: Part I to issue the necessary instructions to the contractor;
Part II to set out the terms of payment once discussed with the contractor. Thus
urgent variations can be sanctioned by the employer and work can proceed.
The employer needs a sufficiently large technical staff available to appraise the
technical issues involved without delay. The advantage to the engineer is that
the technical issues are thoroughly examined and solutions accepted before
commitment to the very large sums which sometimes have to be sanctioned,
and the advantage to the employer is that he is fully aware of the changes needed
and their effect on the final cost.
While variations are normally decided and instructed by the engineer it is
not uncommon for contractors to put forward ideas either to save cost or time.
Indeed this is encouraged by value engineering procedures and can be a useful
way of controlling or reducing the final price. The ICE conditions recognize
the potential of such proposals and allow for sharing of any changes in value
or time between both parties. Any proposals accepted must be instructed by the
engineer before coming into effect.
Although the rest of this chapter mostly refers to the powers of the engineer
under the contract, this must be taken as implying that the resident engineer
must act similarly.

17.2 Payment for increased quantities

Re-measurement types of contract, such as those covered by the ICE 7th edition
(Measurement Version), are let on the basis that the actual amount of work done
is not expected to be exactly the same as that estimated from the contract draw-
ings. The intention of the contract is that where a change of quantity requires no
different method of working by the contractor and does not delay or disrupt his
work then the billed rates still apply. However, Clause 56(2) of the ICE condi-
tions recognizes that, if there is a considerable difference between the measured
and billed quantity, the contract allows a review of the rate to ensure that a
proper price is paid. If the engineer is of the opinion that a quantity has changed
so much that ‘any rates or prices (are) rendered unreasonable or inapplicable
in consequence’, then the engineer, after consultation with the contractor, can
increase or decrease such rates or prices. The change in quantity has to be sig-
nificant to justify an altered rate.