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Dear All,
We are dredging co.,we have contract consists of 2 phases,the first to dredge up to -4m,the second to dredge up to -8m.
Each phase has certain time and rate .
During the 1st phase duration ,the owner instructed me to dredge up to -8 directly (of course to save the remobilization cost and time).
Is that a variation order or a claim?
As the owner transfered some works from the phase 1 to phase 2.
Thanks and Regards,
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Hi Mike
I agree with you but I'd even go one better I think.
Even if the contract had been signed AND the work was underway, the variation represents such a fundamental change in the method and sequence of work (even though the scope remains the same) that the original intention is lost and a new price/timescale should be agreed.
But if it is only a letter of intent, its a no-brainer I agree.
Hi Ken
Nice to hear from you again.
The main basis of my opinion is that the contractor is working from an ill defined letter of intent - so no contract is extant.
But it would still run even if there was a fully signed up contract but no work had started.
Best regards
Mike Testro.
Its important to recognise that a variation is not just limited to the scope of work. In this case the scope of work remains the same . i.e dredge to -8m.
There is a credit for the removal of demobilsation and remobilisation between the 2 phases. But there is time and cost consdierations of doing the dredging deeper in one operation.
However in this case the variation is so fundamental that Mike is right when he says that the only way forward is to renegotiate the contract - both time and money
Regards
Ken
The customer has instructed a change to be made in the agreed scope of work. This is a clear variation and as such this should be formally notified to the customer, typically by letter. This change might impact cost and\or time and introduce new risks (technical, commercial and occupational safety risks) to the project. The first thing to do is to take stock, assess the change to establish the full schedule and costs impact and then importantly revisit any task risk assessments to establish if they are still valid. All the impacts should then be communicated to the customer.
D
Hi ;
Option 1: Scope of Work has changed to the Phase 1 work, there is variation claim
1) You may need to mobilise additional equipment to dredge at deeper location, definitely there is cost involved.
2) Material at different level vary, disposal cost also may vary , definitely cost involved
3) Rate of excavation too vary at deeper place , time involved
4) You do not required double mobilisation, cost saving
Senthuran
Hi Bill
The fundamental difference is that stage 1 was dredging o > -4 m which has a price time and stage 2 was from -4 > -8 which has another price and time
Now they are being asked to dredge from 0 > -8 in one hit and there is no price or time for that operation.
So a new price and time has to be agreed.
Best regards
Mike Testro
Hi Mike,
Can you kindly explain further as to why the scope of works will be presumed as differrent from what was agreed. As I uderstand it, works under A first then B second is no different to A directly going to B. Nothing is ommited. However the variable that might change with this fast tract approach is time, which should be looked up.
Cheers,
Bill
Hi Ayman
It seems that the employer has omitted phase 1 and extended phase 2.
As usual it all depends on what it says in the contract but to my way of thinking you now have a totally different scope of works.
My advice is to immediately negotiate the new contract rates and time before proceding any further
Best regards
Mike Testro
As I understand it, the scenario you mentioned does'nt qualify as a variation order simply because you still have the same scope of works. However, you still need to check if the change in methodology will affect your timely delivery. If yes,then only time can be variated/extended from your contract.
Cheers,
Bill
Email: PPadmin@planningplanet.com
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