1. LECTURE 5 FORMULATION & PRESENTATION OF OTHER CLAIMS
Variations
Acceleration
Fluctuations
Quantum Meruit
Finance charges
Cost of preparing the claim

2. VARIATIONS OF THE CONTRACT
Change of the terms of a contract such as the level of price or basis of payment or contract period or a change of its scope.
VARIATIONS UNDER THE CONTRACT
Change the design, quality or quantity of the works described under the contract.

3. DEFINITION OF VARIATIONS
"Any agreed change which adds to or subtracts from the terms and conditions or intent of the original contract. It is usual that a contract contains either an express or implied term that a variation does not vitiate the contract."
EXTENT OF VARIATIONS
The variations must be similar in character to the work being done under the original contract
It is limited to what the parties might reasonably have contemplated would be a variation

4. VARIATION UNDER HKSFBC
Clause 11 (2) of the Conditions of Contract defines variation as:
alteration design, the or of the quality or of the Works as
modification quantity
shown upon the Contract Drawings and described
by or referred to in the Specification

5. VARIATION UNDER HKSFBC INCLUDES:
addition, the omission or of any work, the alteration of the substitution
kind or materials standard of any of the or goods to be used in the
Works, & the removal from the site of work, executed any materials or or goods brought

6. ISSUE OF VARIATIONS
Variations, except invariably occasions such as safety matters, should be confirmed in writing before the work being executed.
The contractor submits the TIME & COST effects of the variation to the Employer for settlement
The Employer may agree, at no extra cost, the variation proposed by the Contractor to simplify his construction sequence, etc.

7. COMMON VARIATIONS Under measurement of provisional or prime cost sums
Unavailability of specified materials
Lack of coordination of trades and consultants
Change in user requirements
Design changes
Changes in site conditions
Mistakes by the contractors
Latent defects
Lack of research into local conditions
Changes by authorities
Errors in documentation

8. TYPES OF VARIATIONS IN HKSFBC
Cl 4(1) Variation from the Contract Drawings or Specification Cl 4(1) Variation conforming to the Act or Ordinance of Government Cl 11(2) The alteration......of the Works (As 'Variation under HKSFBC' above) Cl 12(3) Correction of error in contract drawings / specification Cl 32 (3) Instructions for protective work etc. during hostilities Cl 33 (1)(d) Removal of debris, protective works, make good war damage Cl 36 (5) (f) Fluctuation

9. VALUATION OF VARIATIONS
PRO-RATA
RATES
BQ / SOR
STAR RATE (NEW RATE)
CONTRACTOR'S
QUOTATION
DAYWORKS

10. METHODS OF VALUATION OF VARIATION
Similar character under similar conditions
The prices in the BQ / Schedule of Rates
Not similar character or not under similar conditions
The prices in the BQ / Schedule of Rates as basis
Fair valuation
Work cannot be measured and valued
Daywork rates - inserted at tender
Daywork rates - Labour cost + Plant cost (Material cost +15%)
Omission
BQ rate / Schedule of Rates
Substantial omission
remaining items - use the prices in the BQ / Schedule of Rates as basis
fair valuation

11. ARGUMENTS FOR USING NEW RATES
Changed conditions / circumstances
different from those methods, etc. contemplated in the tender stage
Changed quantities
e.g. increase of concrete volume may require overtime working
Changed timing
Works not in the same period of the program
Small quantities
loss of purchasing discount
higher rates for smaller quantities of work
Time related costs
extra pumps, tower crane, supervision & other preliminary costs due to variation

12. CAN A CONSULTANT CHOOSE NOT TO USE THE ERRONEOUS RATES ?
The rates, even erroneous, generally stand in valuing variations.
PAYMENT OF VARIATION
Variation to be paid, if works completed, in interim certificates (Clause 11(5))
Variation cost to be adjusted in the Contract Sum
Variation to be paid upon determination (Clause 26(2)(b)(ii),(iii))
BILLS OF VARIATION
Clause 30(5)(a) - The main contractor shall be supplied with a copy of the priced Bills of Variation not later than the end of the Period of Final Measurement and Valuation.

13. PROCEDURE FOR MAINTAINING RECORDS OF VARIATIONS OF WORK
Obtain A. I. or confirmation of verbal instruction or Clerk of Works instructions empowered by the Architect.
Check the contract conditions for any conditions that are precedent to a claim. e.g. notice of claim to be submitted within a certain period.
Prepare standard form for routine or repetitive variation work to simplify the procedure.
Keep all delivery notes, vouches, invoices, etc. about materials, plant, etc.
Complete Daywork sheet everyday with labour, material, plant used for variation.
Request Clerk of Works to countersign the Daywork sheet everyday the day after completion of the variation work.
Record the details of the variation work in the Site Diary Book so that it can be easily traced at a later stage.
Submit the variation or daywork claim as soon as possible to the consultant Q.S. for early and easy settlement.

14. MINIMIZING VARIATIONS
Coordinate with
consultants
Work as a team
Examine climatic and
local conditions
Not to be too
innovative
Test materials before
use
Construct prototype
& samples
Take care in
establishing the
contract
documentation
Read & response to the
brief
Examine precedence
Prepare checklist
Provision for unknown
Adequate site testing
Consult with
authorities

15. ACCELERATION REASONS: Earlier completion for commercial reasons
Cost of acceleration is less than the cost of
prolongation caused by qualifying events
Contractor's savings in escalation costs for earlier
completion
There is no acceleration clause in Hong Kong Standard Form. If acceleration is required, separate agreement with the following is required:
Revised Date for completion
EOT for subsequent delay by qualifying delay
Revised Liquidated Damages
Revised program for the remaining works

16. ACCELERATION COSTS Non-productive overtime not all overtime payment
only those additional required for acceleration
Extra staff & operatives
Higher rates of pay
incentives
travelling time
subsistence
transportation
Lighting & power
in winter
Loss of productivity
inefficient output for labour in a congested site
coordination of various trades & activities
waiting time between activities
Equipment & plant
additional plant / equipment
additional idling time

17. FLUCTUATION Fluctuation AMC x MI PMC x MI
to be =  
recovered BI BI
Actual fluctuation Planned fluctuation
AMC = actual monthly cost
MI =index for relevant month
PMC =planned monthly cost
BI =base index

18. QUANTUM MERUIT Action on quantum meruit - for as much as he has earned
void contract - it cannot be pleaded in court as the basis for damages.
work done by the contractor based on verbal confirmation by the Employer, but later agreement cannot be reached.
Changes which extents are outside the definition of the variation - substantial variation.

19. FINANCE CHARGES
Additional finance charges for additional works (if such cannot be compensated in the valuation of variation works)
Undercertified amount of work done
Late issue of interim payment certificate or payment
Delay on the works and hence the release of retention
However, interests are not recoverable

20. COST OF PREPARING THE CLAIM
Normally the cost is not recoverable
May be recovered in the staff cost under the prolongation claim if it is prepared by the staff
The employer may have to recover the contractor if the contractor has to prepare the final account himself instead of by the consultants of the employer
Certain works prepared for the arbitration