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evaluation of variations

Evaluation of Variations on Lump Sum Contracts

I recently presented a Construction Claims Workshop for Claims Class. During one of the many discussions, someone asked about lump-sum contracts and items included in the bills of quantities, but not shown on the drawings.

The question was:

if something is included in the bill of quantities but not required, can the Engineer omit the price included in the bill of quantities for this item?

To provide an accurate answer, I would need to review the contract documents to understand their order of precedence and the precise wording of the contract. However, let's assume the usual situation:

  • The Contractor must construct the works according to the contract.
  • Bills of quantities are stated to comprise only an estimate of the works and may not be relied on.

In this case, the answer is quite simple, but often misunderstood.

Simply put, the bill of quantities is merely a breakdown of the Contract Price. It may exist to evaluate interim payment applications and variations but may not be accurate. Consequently, the scope of works may only be derived from the drawings and specifications.

Therefore, if something exists in the bill of quantities but is not shown on drawings or in specifications, it is not included within the Contract Price. The Engineer may not omit something that is not there in the first place.

A good way to argue this case with such an engineer is to ask if you may be paid for items shown on the drawings but not in the bill of quantities. I am sure that the Engineer would immediately refer to the conditions that state that the bills and quantities are not to be relied on and deny your request.

I hope that this answers this often-asked question. If you'd like to read more on this topic, check out a related blog where we look at Omission of Items in the Bill of Quantities, But Not Shown on the Drawings.

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