Civil Engineering Project Management (4th Edition)
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Variations and claims 207<br />
reaching a decision on a claim. But irrespective of whether such requirements<br />
exist, the engineer should always report major claims to the employer and allow<br />
both parties to put their views to him.<br />
On very large projects where an ordered variation may incur heavy extra<br />
expenditure, it is advisable that the employer is involved in the issue of any<br />
order which incurs significant extra cost and many contracts stipulate this. On<br />
many such projects, including the Mangla project mentioned in Section 5.6,<br />
the engineer will report any proposed major variation to the employer for his<br />
agreement, with a technical report in justification. Variation orders can then be<br />
issued in two parts: Part I to issue the necessary instructions to the contractor;<br />
Part II to set out the terms of payment once discussed with the contractor. Thus<br />
urgent variations can be sanctioned by the employer and work can proceed.<br />
The employer needs a sufficiently large technical staff available to appraise the<br />
technical issues involved without delay. The advantage to the engineer is that<br />
the technical issues are thoroughly examined and solutions accepted before<br />
commitment to the very large sums which sometimes have to be sanctioned,<br />
and the advantage to the employer is that he is fully aware of the changes needed<br />
and their effect on the final cost.<br />
While variations are normally decided and instructed by the engineer it is<br />
not uncommon for contractors to put forward ideas either to save cost or time.<br />
Indeed this is encouraged by value engineering procedures and can be a useful<br />
way of controlling or reducing the final price. The ICE conditions recognize<br />
the potential of such proposals and allow for sharing of any changes in value<br />
or time between both parties. Any proposals accepted must be instructed by the<br />
engineer before coming into effect.<br />
Although the rest of this chapter mostly refers to the powers of the engineer<br />
under the contract, this must be taken as implying that the resident engineer<br />
must act similarly.<br />
17.2 Payment for increased quantities<br />
Re-measurement types of contract, such as those covered by the ICE 7th edition<br />
(Measurement Version), are let on the basis that the actual amount of work done<br />
is not expected to be exactly the same as that estimated from the contract drawings.<br />
The intention of the contract is that where a change of quantity requires no<br />
different method of working by the contractor and does not delay or disrupt his<br />
work then the billed rates still apply. However, Clause 56(2) of the ICE conditions<br />
recognizes that, if there is a considerable difference between the measured<br />
and billed quantity, the contract allows a review of the rate to ensure that a<br />
proper price is paid. If the engineer is of the opinion that a quantity has changed<br />
so much that ‘any rates or prices (are) rendered unreasonable or inapplicable<br />
in consequence’, then the engineer, after consultation with the contractor, can<br />
increase or decrease such rates or prices. The change in quantity has to be significant<br />
to justify an altered rate.