Frequently Asked Questions - NEC
The "normal" way to value variations is to use bill of quantities rates. The usual rules are:
- where the varied work is of similar character to, is executed under similar conditions as, and has not significantly changed the quantity of, works set out in the contract rates and prices for the work the rates are to be used.
- where the varied work is not then the rates and prices for the work shall be the basis for determining the valuation; or
- where the varied work is not of similar character, it shall be valued at fair rates and prices.
Helpful guidance on the valuation of variations under an ICE contract has been given in the case of Weldon Plant Limited - and - Commission for New Towns.
Two questions beg to be asked:
- When is it reasonable to apply Bill Rates? Where a Contractor has a particularly good set of rates and the work has not substantially changed he can rely on these for valuations of variations. The corollary being that if the Contractor has under priced a rate item he is also stuck with this regardless of whether it is advantageous the Employer. The rules are contract specific.
- What is a fair valuation?
In answering the first of these questions it has been said:
"So too is an Employer stuck with rates and prices which have been accepted by him as part of the Contract. Unless the Contract permits, he cannot extricate himself from the bargain that has been made."
Change valuation under the NEC Contracts is different.