Disclaimer

These questions and answers are for general information and guidance only. They should not be relied on in particular situations without contacting Quigg Golden and receiving detailed advice.

How important is a programme?

Apart from being an essential planning tool for any construction project, programmes can have a specific contractual meaning. The most important programme, but also one of the most unusual, is a programme which actually forms part of the contract. This is a two edged weapon, since if any dates shown on a contract programme are not achieved then the contractor is automatically in breach of contract. One important programming item which is almost always included in the contract is a completion date. This is described in clause 23 of JCT 98; and in clause 43 of the ICE 6th Edition.

During the tender process it is good practice for the contractor to draw up a tender programme. This does not form part of the contract but is usually used by the contractor to estimate the contract duration and the critical elements and sequence for the Works. If the programme is detailed with reference to each part of the contract, it becomes of tremendous importance whenever the job begins to change as a result of changes by the Client, actions of the others on site, or unforeseen weather or ground conditions. This tender programme is commonly used by contractors to show how they had originally intended to do the work and consequently, when compared with an as-built programme or progress programmes, shows how much they have been prevented in using the method of work they had intended to complete the works as planned. This is a very important tool in establishing a claim for loss and expense because of disruption to the works or for attempting to prove an extension of time or acceleration claim. How accurate this tender programme is, very much depends on the priority allocated to it at tender stage, the skill of a contractor’s estimator and the ability to accurately reflect the elements of the work on paper. Whilst this will cost money for preparation, management or administration without careful preparation these costs will be subsumed by the cost of preparing a claim and the undoubtedly lesser amount that will be recovered. After all, the side with the better record wins.

The contractor must base his rates and contract sum on something. It, therefore, should not come as a surprise to clients or their professionals that whenever changes occur in the progress of the works, it costs the contractor money or has a cost implication. These are costs that clients must be prepared to pay. Most contracts have a mechanism for allowing the contractor to recover losses incurred in this way.

It is therefore vitally important that tender and successive programmes are carefully maintained and inter-related as the work progresses. The importance of these is often lost in the thick of battle during the contract.

What rates and prices can we use to price variations?

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.

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