Daywork – What is it and how should it be priced? Back to Basics #11
Under standard form construction contracts, changes may be made to the scope of the work or the specification applicable to it, meaning that any additional costs incurred because of the change to the work can be agreed and added to the contract sum.
Under the JCT D&B 2016, these changes can be valued according to any rates for measured work in the contract sum analysis (where the work is of a similar nature), or adjusted contract rates if the work is similar with different conditions or significantly different quantities, or a fair valuation, or as Daywork where the usual rules of valuation cannot be applied. Daywork is work that is incidental to the contracted works and cannot be valued under the contract under the normal rules.
The NEC contracts do not recognise the term “Dayworks” but only recognise any works of this nature if they form part of a compensation event. Otherwise, the schedules that set out the cost components applicable to compensation events under each main option will state how the Daywork (i.e. a compensation event) is to be priced. Alternatively, the contract states that rates and lump sums can be used if the parties agree.
The JCT D&B 2016 contract requires that the prime cost of such work shall be used (as defined by the RICS, that is the resources used excluding the contractor’s overheads and profit), with any Percentage Additions stated in the Contract Particulars to be applied to it. Alternatively, the Contract Particulars may contain All-Inclusive Rates already agreed which include the percentage additions already. The Dayworks should be valued at these rates where the resources utilised (including plant, materials and labour) shall be recorded and given to the Employer for verification within 7 days of the work being executed. This reflects the common principle that to demonstrate Daywork requires good records to substantiate the resources used.
In some cases, the contract will not say how Dayworks should be valued. Here, it is possible to turn to other industry publications for help. The Civil Engineering Contractors Association (CECA) Dayworks Schedules provide a set of rates to determine the cost of carrying out work of a civil engineering nature on a labour, plant, materials and supplementary charges basis. Records to substantiate the claim for the work done will need to be both contemporaneous and submitted in a timely manner for verification.
Ramskill Martin can help you in determining how any contract you are a party to, requires you to price Dayworks and can assist in the presentation of any such claim for work done that cannot be readily valued under the contract.
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