Back to Basics #32 - Schedule Two Variations Under JCT [Part 2]
Schedule 2 Variations – Submission and Acceptance
Submission of a quotation
The JCT Standard Building Contracts 2016 (“SBC”) and the JCT Design and Build Contract 2016 (“D&B”) deal with submission of the relevant Variation Quotations/Contractor’s Estimate differently.
Paragraph 3.1 of the SBC’s Schedule 2 requires for the Variation Quotation to be submitted not later than 21 days from the later of:
- The date of receipt of the instruction or invitation; or
- The receipt by the Contractor of information sufficient to enable him to prepare the quotation.
The D&B however, under Paragraph 2.2 of Schedule 2, requires for the Contractor to submit the Contractor’s Estimate within 14 days of the date of the relevant instruction, unless agreed otherwise.
Acceptance of a quotation
Upon submission, the SBC requires that the quotation “remain open for acceptance by the Employer” for not less than 7 days from receipt.
Should the Employer wish to accept a Variation Quotation under the SBC, the Architect/Contractor Administration shall, under Paragraph 4, confirm the acceptance through an instruction. The instruction is to state the adjustment to the Contract Sum and the adjustment to the time required by the Contractor for completion of the Works.
Under the D&B Contract, the Employer, within 21 days of receipt of any estimate, shall give the Contractor notice that he wishes to accept the estimate or wishes to negotiate on the amount of the addition to the Contract Sum. Paragraph 3.5 states that the amount accepted or agreed shall be added to the Contract Sum and no further additions shall be made for direct loss and/or expense in relation to the works covered by the estimate.
Non-acceptance of a quotation
In the case of a Variation Quotation/Contractor’s Estimate not being accepted, it is important to understand your position should the works still be required.
Paragraph 5.1 of the SBC specifies that the Architect/Contract Administrator is to provide instruction for the Variation not to be carried out, should it not be required. Alternatively, an instruction may be issued, instructing the Contractor to undertake the Variation, whereby it is to be valued in accordance with the Valuation Rules (Clauses 5.6 to 5.10).
Similarly, under Paragraph 2.5 of the D&B, if agreement cannot be reached on all or any of the matters relating to the Change, the Employer may withdraw the instruction for the works to be carried out, or instruct the Change and the works be valued in accordance with the Valuation Rules.
Should a Variation Quotation not be accepted, the SBC enables a “fair and reasonable” sum to be added to the Contract Sum, to account for the Contractor’s cost in preparation of the quotation. However, the Contractor’s Estimate under the D&B, shall be at no cost to the Employer, except where the Contractor undertook additional design work “soley and necessarily” for the purpose of preparing his estimate. In this case, the design work shall be treated as a Change under the Contract, and valued accordingly.
Points to Takeaway
It is important to understand your contractual obligations and entitlement when it comes to providing and/or receiving quotations for additional works under JCT contracts. Not all contracts deal with quotations in the same manner.
Should a quotation not be accepted, the Employer may still instruct the works to be undertaken, which will then be valued in accordance with the Valuation Rules under the Contract.
In the circumstances that a quotation is not accepted, the Contractor may be entitled to payment for the costs incurred preparing the quotation.
If you need any assistance with Valuing Changes under JCT (or any other form of contract) Ramskill Martin’s Specialist Consultants can provide you with assistance and advice to help you secure your entitlement.
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Manchester
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Birmingham
Birmingham Business Park 4200 Waterside Centre Solihull Parkway Birmingham B37 7YN Tel – 0121 481 2381