Evaluation of Variations on Lump Sum Contracts
At a recent Claims Class Construction Claims training course, one delegate raised a frequently asked question in connection with lump-sum contracts and items included in the bills of quantities, but not shown on the drawings. The question was ‘if something is included in the bill of quantities but not required, can the Engineer omit the price included in the bill of quantities for this item?’
Obviously, to provide an accurate answer, it would be necessary to study the contract documents, their order of precedence and the precise wording of the contract. If we assume however that the usual provisions apply whereby the Contractor is obliged to construct the works in accordance with the contract documents, but the bills of quantities are stated to comprise only an estimate of the works and may not be relied on, the answer is quite simple but often misunderstood.
Simply put, the bill of quantities in such circumstances is merely a breakdown of the Contract Price, which may be used to evaluate interim payment applications and variations and may not be regarded as being an accurate document. The scope of works may thus, only be derived from the drawings and specifications. If, therefore something is measured in the bill of quantities but not shown on the drawings or in the specifications, then it is not included within the Contract Price. The Engineer may not therefore omit something that is simply not there in the first place.
A good way to argue this case with such an engineer is to ask if you may be paid for items shown on the drawings but not in the bill of quantities. I am sure that in such a case, the Engineer will immediately refer to the conditions that state that the bills and quantities are not to be relied on and deny your request.
We have published two case studies that have relevance to this subject, which we would be happy to share with you on request.
To request the case studies, please send an email with your contact details to firstname.lastname@example.org with “Evaluation of Variations case studies” in the subject line.