[2] Timely reciprocity of information, not timeout rules, shortens agreement time-frames.
There is an industry tendency to never call anything a variation when directed. Followed by blanket rejection of Contractor Notice of Variation, citing clarification only, reasonably required, reasonably foreseeable, deemed allowed, normal industry process, no effect on quantity, cost or time. When this occurs, we must remind ourselves of the Sesame Street 3910 Variation Rule Book, Come and play, everything is “A” OK…
Clues to Co-operation rules in NZS3910
9.2.4 “as soon as practical” the Engineer shall confirm or disallow a Variation, and give reasons.
9.3.3 When a Variation is ordered or allowed, the Contractor and the Engineer shall each provide the other, without undue delay, such evidence as may reasonably be required to establish the correctness of all relevant quantities and costs and the effect on the programme.
9.3.4 The value, if any, of each variation shall, as far as possible, be determined by agreement.
One of these things is not like the other
Red line markups on shop drawings are invariably a change in obligation. Unless the red line mark-up is correcting an error that is obvious on its face, the amendment of detail is a variation.
9.1.1 The Engineer may order any Variations to the contract works including a change in level, line, position , or dimensions of any part of the works. Or direct or change the order in which the work is to be carried out.
9.2.1 The Contractor shall not vary the contract works without an order in writing from the Engineer.
9.2.2 The Contractor shall give notice where the Engineers instruction is issued as a clarification and the Contractor considers it to be a Variation.
The Sesame Street co-operation rule book requires all changes in obligations to be recognised, if not by the Engineer when directed, then after Notice by the Contractor. The consequences of not notifying what appears on the face of it to be a nil cost variation, could be catastrophic, when future unforeseen consequences of change cannot be recovered because notice rules have timed you out of being awarded a variation, because the original variations that cost nothing initially, went “un-noticed” by the Contractor to the Engineer.
Yes, you can get an extension of time and avoid LD’s for the unforeseen, but missing out on later incurred time related costs, because you failed to give notice for a nil cost variation earlier, is not smart.
Even if you do not charge extra shop drawing hours for alternative obligations with no bricks and mortar cost, at least it is easier to get an EoT awarded if a longer overall shop drawing process is littered with recognised variations.
All changes in obligation need to be recorded as a variation to the contractor’s original obligation, so everyone is accountable for their choices in the end.
Oscar the Grouch Variation Pressure Processing & Reciprocity
You do your best to pull together commercial information really fast, but never fast enough for the client. Then get a rejection and request for further information, repeated, with nothing meaningful scheduled for progress payment, citing lack of information as a reason for non-payment. These are typical tactics to buy time to pass subs claims uphill and wait for what the Principal’s consultants’ have to say, before being independently objective, and processing the claim properly.
9.3.3 requires the Engineer’s or Main Contractors “evidence as may reasonably be required to establish the correctness of all relevant quantities and costs and the effect on the programme?” to be exchanged “without undue delay”. This applies equally to Main Contractors and subcontractors, to reciprocally exchange valuation information in a timely manner.
Where there are time out rules on one party, and a reciprocity requirement on the other party, then the definition for “shall each provide the other, without undue delay” means the claim recipient has to work to the same time out rules as the submitter. Endless time to reject, must end.
Timely reciprocity of information, not timeout rules, shortens agreement timeframes.
The Count says “Co-operation ‘as far as possible’” to reach agreement
The Engineer can determine the value of a variation, but only after they have exhausted the co-operation card.
9.3.4 requires the contractor and the Engineer to determine the value of a variation “as far as possible” by agreement. “There is no ‘last word’ in the process of diplomacy”. Essentially, if one party still has information, argument, interpretation, to be had, it is incumbent upon the other to listen, consider and objectively respond. If you can’t agree to disagree, you must keep trying to agree. If the Engineer dis-engages, times out, or otherwise proceeds to unilaterally decide a matter, without seeking concurrence “as far as possible”, then they have failed to do their job. The Count loves to count. If it is not right, count it again…
The Big Bird Summary of the Sesame Street 3910 Variation Rule Book
[1] All changes in obligation need to be recorded as a variation to the contractor’s original obligation, so everyone is accountable for their choices in the end.
[2] Timely reciprocity of information, not timeout rules, shortens agreement time-frames.
[3] Avoid a rush to judgement, remind your counterparts, we are all obliged to converse with the upmost co-operation. If it is not right, count it again…
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“Celebrating 50 years of New Zealand Building Economist 1972 to 2021”
By Matthew Ensoll
FNZIQS. Reg.QS.
Editor New Zealand Building Economist.
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