Extension of time

Many construction contracts allow the construction period to be extended where there are
delays that are not the contractor's fault. This is described as an extension of time (EOT).
Variations may (but do not necessarily) constitute relevant events that can merit
an extension of time and so adjustment of the completion date. See extension of time for
more information.
Conclusion
Variations are often sources of dispute, either in valuing the variation, or agreeing whether
part of the works constitute a variation at all, and can cost a lot of time and money during
the course of a contract. Whilst some variations are unavoidable, it is wise to minimise
potential variations and subsequent claims by ensuring that uncertainties are eliminated
before awarding the contract.
This can be done by:
Undertaking thorough site investigations and condition surveys.
Ensuring that the project brief is comprehensive and is supported by stakeholders.
Ensuring that legislative requirements are properly integrated into the project.
Ensuring that risks are properly identified.
Ensuring that designs are properly coordinated before tender.
Ensuring the contract is unambiguous and explicit.
Ensuring the contractor's rates are clear.
Preparing concise drawings, bills of quantities and specifications, providing for all
situations which are reasonably foreseeable.

Bill of quantities BOQ

Contents
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1 Introduction
2 Standards for bills of quantities
3 Preparing bills of quantities
4 Approximate bill of quantities
5 Find out more about related subjects
5.1 Related articles on Designing Buildings Wiki
5.2 External references
Introduction
The bill of quantities (sometimes referred to as 'BoQ') is a document prepared by the cost
consultant (often a quantity surveyor) that provides project specific measured quantities of
the items of work identified by the drawings and specifications in the tender documentation.
The quantities may be measured in number, length, area, volume, weight or time. Preparing
 a bill of quantities requires that the design is complete and a specification has been
prepared.
The bill of quantities is issued to tenderers for them to prepare a price for carrying out the
works. The bill of quantities assists tenderers in the calculation of construction costs for
their tender, and, as it means all tendering contractors will be pricing the same quantities
(rather than taking-off quantities from the drawings and specifications themselves), it also
provides a fair and accurate system for tendering.
The contractor tenders against the bill of quantities, stating their price for each item.
This priced bill of quantities constitutes the tenderer's offer. As the offer is built up of
prescribed items, it is possible to compare both the overall price and individual items
directly with other tenderers' offers, allowing a detailed assessment of which aspects of
a tender may offer good or poor value. This information can assist with tender negotiations.
The priced bill of quantities will also:
Assist with the agreement of the contract sum with the successful tenderer.
Provide a schedule of rates assisting with the valuation of variations.
Provide a basis for the valuation of interim payments.
Provide a basis for the preparation of the final account.
Valuation of variations
Variations may give rise to additions or deductions from
the contract sum. The valuation of variations may include
not just the work which the variation instruction describes,
but other expenses that may result from the variation, such
as the impact on other aspects of the works. Variations
may also (but not necessarily) require adjustment of the
completion date.
Variations may be valued by:
Agreement between the contractor and the client.
The cost consultant.
A variation quotation prepared by the contractor and
accepted by the client.
By some other method agreed by the contractor and
the client.
Valuations of variations are often based on the rates and
prices provided by the contractor in their tender, provided
the work is of a similar nature and carried out in similar
conditions. This is true, even if it becomes apparent that
the rates provided by the contractor were higher or lower
than otherwise available commercial rates. The
contractor's rates do not become reasonable or
unreasonable by the execution of variations (see Henry
Boot Construction v Alstom (2000)).
If similar types of works to those instructed by a variation
cannot be found in the drawings, specification or bills of
quantities, then fair valuation of the contractor's direct
costs, overheads and profit is necessary.
However, NEC contracts do not value variations based on
rates in the tender. Guidance on assessing compensation
events states:
"Assessment of compensation events as they affect Prices
is based on their effect on Defined Cost plus the Fee. This
is different from some standard forms of contract where
variations are valued using the rates and prices in the
contract as a basis. The reason for this policy is that no
compensation event for which a quotation is required is
due to the fault of the Contractor or relates to a matter
which is at his risk under the contract. It is therefore
appropriate to reimburse the Contractor his forecast
additional costs (or actual costs if the work has already
been done) arising from the compensation event."
In other words the contractor can ignore their tender
pricing and claim cost plus on variations. However, there
may be disagreements about items such as factory
overheads and management which are very hard to
evaluate. In addition, given the complexity and length of
the supply chainin major building works, getting forecast
pricing from all the parties affected takes time, often
beyond the date by which the contract administrator has to
make the decision as to whether or not to instruct the
variation. They may then