HOW TO IDENTIFY VARIATIONS?

Variations do not mainly result from the direct instruction of a change by the Engineer. The key other issues that often result in variations are 

• Identification and resolution of a discrepancy/inadequacy/error in the Contract documents (Drawings, Specifications, etc)
• The shop drawing process (preparation and review)
• The consequential effect of instructed variations on other parts of the project
• The review of method statements and other technical submissions of the Contractor
• The review and approval of subcontractors

Identification and resolution of a discrepancy/ inadequacy/ error in the Contract documents (Drawings, Specifications, etc). 

In these days of reduced tender preparation times and lower consultant fees the Contract documents, and in particular, the design documents (drawings/specifications, etc), are unlikely to completely represent the project. In most cases, discrepancies/inadequacies/errors, etc in the Contract Documents will be notified to the Engineer. Thereafter it is common that the Engineer will try to protect the position of his documents/design by doing the following

• Get the Contractor to correct the issue as part of the shop drawing process and/or
• Ask the Contractor for a proposal to correct the issue and/or
• State that there is no such issue and provide further interpretation of the Contract Documents

In each case, the Engineer’s actions are likely to result in some kind of change to the Contract but the paper trail/project documentation is likely to be insufficient to support a variation claim. 

Therefore in such cases, it is always the best strategy to get the Engineer to resolve the discrepancy/error / by correcting/completing the relevant part of the Contract document and issue to the Contractor which can be interpreted as a written instruction and sufficient to support a future variation claim. 

The shop drawing process (preparation and review)

Most projects will include for the preparation and submission of shop drawings by the Contractor. This procedure is often misused by the Engineer, and with particular reference to variations the following often occurs 

• Contractor completes an incomplete base design in preparing the drawing and at the same time unknowingly incorporates additional works into the shop drawing
• Engineer introduces changes/variations to the drawings during the review/approval period

In each case, it is unlikely that the paper trail/project documentation will be sufficient to support a variation claim. Therefore in terms of protecting our variation entitlements during the shop drawing process, we should attempt to 

• Where the Contract drawing is insufficient issue an RFI ( Request for Information to the Engineer)
• If the Engineer makes changes to shop drawings during review only incorporate them in the revision if the Engineer issues an instruction

The consequential effect of instructed variations on other parts of the Project

It is likely that most variations will have a consequential effect on other works, which could include 

• Change in the planned sequence of other works
• Changes site access to other works
• Use of plant and equipment planned for another section of works requiring additional plant/equipment  

Accordingly, upon receipt of any variation and during its execution, its consequential effects should be checked to ensure that the full entitlements are realized. 

The review of Method Statements and other technical submissions of the Contractor

Most Contracts will require the submission of method statements for the Contractor to describe the execution of the Works. As part of the review process, the Engineer may make changes to the planned execution which could result in changes/variations. Unless the changes were as a result of safety or other issues specified in the Contract the Engineer’s actions would result in variations to the Contract, without the issue of a formal variation instruction.

Accordingly, all comments and requests for change of any method statement or other technical submission should be carefully compared with the Contract and where changes exist the Engineer should be requested to instruct the changes before any resubmission of the Contractor’s document is made. 

 The review and rejection  of Subcontractors

Most Contracts will provide for the approval of all subcontractors and in many cases, the Engineer will reject the Contractor’s proposal and either formally or informally suggest an alternative. If the Engineer’s grounds for the rejection are insufficient or not provided when requested the action could give rise to a Variation claim, particularly since the use of another Subcontractor is most likely to involve the incurrence of additional costs.

Therefore, in order to effectively manage the identification of variation orders, it is recommended that the following procedures and practices are implemented 

• During shop drawing preparation if the Contract does not contain the required information then a query should be raised to the Engineer as opposed to the preparation of a solution.
• Do not attempt to complete the Engineer’s design during the shop drawing process
• Carefully review all comments made by the Engineer during the review of shop drawings as these may represent instructions/variations
• Issue of single document on a regular basis ( every 1 or 2 weeks) to cover the following matters.
  • Incomplete design matters
  • Outstanding responses from Engineer to RFI / QFAs
  • Notice of all Variations ( those not issued by a formal variation instruction )
• All staff to be aware of work scope and specification to allow them to give internal notice of changes, preparation of a scope summary booklet for all staff to carry at all times
• All verbal instructions to be reconfirmed
• All project documents ( including reviewed shop drawings) to pass through QS / Project Control group to allow changes to be identified

Author : James Bristow