Construction contracts Research Paper Example | Topics and Well Written Essays - 2500 words

Construction contracts - Research Paper Example Variation Types Variations are not restricted merely to the work specification, the cost specification or other quality aspects. Instead, variation can constitute a number of different aspects a few of which are2: an addition to work specifications; an omission to work specifications; a change of materials; changes to construction sequence; working hours change; corrections in the contract documents; corrections in the Bill of Quantities (BoQs) for descriptions and / or quantities of materials used; changes to third party work schedule and scope; changes in the timeline agreed upon in the original contract; changes required to deal with unforeseen circumstances / force majeure. In addition to describing variations as changes to the work, its scope, its cost, quality and other aspects, another potent method of defining variation is as per the party that initiates the variation. CEBE3 has provided a comprehensive method to describe variation as per the initiating party. The causes for variation as per the initiating party have been used to classify variations in an attempt to cover as many variations as possible. The major classifications of variations provided are owner related, consultant related, contractor related and other variations. The research by CEBE provides that there are approximately 53 discernible types of variations that might occur in any construction contract situation4. The various types of variations are shown in detail in the diagram provided below: Figure 1 - Causes of variation as expounded by CEBE (2006) Impacts of Variation Types on Contract Dimensions It would not be possible to discuss all the different types of variations and to analyze them as per FIDIC’s Red Book (1999) interpretations. A few... It would not be possible to discuss all the different types of variations and to analyze them as per FDIC's Red Book (1999) interpretations. A few major variations, including variations that are controversial as being variations or not, are discussed as per CABE classification presented above. A variation in project scope by the owner is one of the most common causes of variation, especially for construction projects. The owner is not on board in typical construction projects planning and design stages and this leads to changes in planning and scoping later. In such circumstances, since the originating party is the owner, the engineer is required to submit a proposal for variation to the contractor as per sub-clause 13.3 of the FIDIC Red Book (1999). Processing of the variation requested is subject to the contractor’s choosing and the owner would have to convince the contractor to comply. Additionally, the condition of the Red Book’s sub-clause that the contractor cannot stop work as variation proposals are being shuttled seems unreasonable. For example, if the owner requires an extensive change of scope that involves the current work, the contractor still has to keep working in the agreed direction even though he proposes variations simultaneously. The lack of clarification for major scope changes makes subclause 13.3 ambiguous and open to dispute between contracting parties. Another area of contention for variation may arise if the owner’s cash stream is somehow affected.