Variations, Change Orders, Change Directives and Claims in FIDIC, JCT & CCDC

Introduction : Variations are an inevitable part of any construction project. Whether it's a change in design, quantity, working conditions or specifications, variations can significantly impact the project's scope and outcome. As such, clients and contractors must clearly understand how to manage variations and the difference between the terms in a standard contract. Variations Variations…

Variations, Change Orders, Change Directives and Claims in FIDIC, JCT & CCDC

Introduction :

Variations are an inevitable part of any construction project. Whether it’s a change in design, quantity, working conditions or specifications, variations can significantly impact the project’s scope and outcome. As such, clients and contractors must clearly understand how to manage variations and the difference between the terms in a standard contract.

variation, change orders, change directive, claims

Variations

Variations refer to any changes to the work scope outlined in the contract. This can include changes in design, specifications, quality, quantity, and working conditions. Variations are usually initiated by the client or their representative and require formal documentation and approval.

Change Orders

A change order is a written agreement between the contractor and the client to change the contract. It typically modifies the original scope of work and may affect the contract price and schedule. Change orders arise after mutual agreement on the impact of the variation.

Change Directives

A change directive is a unilateral instruction by the client to the contractor to make a change before the parties agree on the terms of the change. It’s used when an immediate change is necessary, and the contractual terms (such as price or schedule adjustments) will be determined later.

Claims

Claims request additional time and money due to changes, delays, unforeseen conditions, or other issues not initially anticipated in the contract. Claims are made by the contractor when they believe additional compensation or time is warranted.

FIDIC, JCT,CDCC

CCDC (Canada)

  • Variations: CCDC contracts usually use the change in work terminology. GC6.2 in CCDC governs the change requirements and emphasizes written change orders and mutual agreement before changes are made.
  • Change Orders: GC 6.2 Emphasizes the change order process, which involves notice, negotiation and agreement between the parties.
  • Change Directives: CCDC GC 6.3 explains that a change directive is used to instruct the contractor to implement a scope change in case of no agreement between the parties on price and time. The primary purpose is to avoid further delays in the project’s timeline waiting for approval.
  • Claims: GC 6.5 & GC 6.6 Structured procedures are in place for contractors to submit claims due to a scope change out of contractors’ control. GC 8 is for dispute resolution.

FIDIC Red Book (International)

  • Variations: GC 13 governs and directs the process of variations. Variations are managed through a formal process often involving the Engineer, who is central in administering contract changes.
  • Change Orders and directives: The same terms are not used, but when an Engineer approves a variation, it becomes a change order, and when an Engineer instructs a variation for immediate changes, it is a directive.
  • Claims: GC 8 and GC 20 govern the EoT and claims. Detailed provisions exist for claims, including timelines and procedures for submission and evaluation. GC 21 is for dispute resolution.

JCT (UK)

  • Variations and change order: In JCT (D&B) design and Build, the process change is referred to as variation and is governed by GC3.5. In the JCT (SBC) Standard Building Contract, the process is called the change process and is managed by GC 3.10.
  • Notifications: JCT doesn’t mandate notifications for claims
  • Claims: JCT deals with claims, emphasizing negotiation and resolution in GCs 6, 7 & 9.

Conclusion

In all these jurisdictions, the emphasis is on clear documentation, mutual agreement (except in the case of directives), and structured procedures for claims. However, the roles of various parties (like the Engineer in FIDIC, Architect/Contract Administrator in JCT, and similar roles in North America), the notifications process and the specifics of each procedure can vary.

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