Valuation of a Variation

Hi Faz

Welcome to Planning Planet

The process is very simple.

The original scope of works is measured and valued using bOQ rates.

The revised scope of works is measured and valued using BOQ rates where available - if no relevant rates are available then reasonable rates are applied.

On costs such as design need to be added.

The original total is then deducted from the revised total and the extra value is shown.

Regarding the extra time was it just the extra time to do the work or three weeks on the critical path?

If the first then any supervision and general plant needs to be allocated - provided they are not already in the BOQ rates.

If the end date is delayed then the site prelims need to be added.

A simple change like this can usually be handled by a cost engineer but if you want to employ an independent QS then go ahead.

Best regards

Mike Testro

PS - Please change your silly PP name to your proper name.

Hi Mark

Thanks for welcoming me and I appreciate your answer. I thought you would've figured it out by now that I'm actually not working as a QS or in the construction industry, I'm in my last yr of Uni and the scenario i wrote isn't a real life scenario, it's a scenario from my assignment :)

I've assumed that the 3 week delay has caused a EOT to be given to the Contractor and also assumed he'll be eligible to claim for loss and expenses. I was just unsure how to value the 'extra piling' in the new design (variation). As i've never worked on site or with a construction firm, i don't have the foggiest as to what the cost of the piling will be so I'd appreciate it if you can enlighten me with you vast knowledge and experience sir :)

Best Regards,

Faz

PS - I have chenged my name upon your command.

Hi Faz

There is no such thing as a universal cost for piling.

Each project has its own cost base so your cost for extra piling will come from the costs associated with your project.

This will be found in the Cost Plan or BOQ.

If this is completely new piling then - in real life - you would get quotations from piling contractors.

As this is a hypothetical assignment and if you have no given cost base then I suggest you create your own based on a made up currency unit such as UV$ - Universal Dollars.

In this way you will demonstrate your understanding of the principles but no one can say your costs are wrong.

I would do some research as to how piling is measured and create your own cost plan.

Don't forget the pile caps and/or ring beams.

Good luck and best regards

Mike Testro

A little clarification if I may....

Say work stopped 1st March due to soft spot. Critical progress stopped for 3 weeks.   EOT sought for 3 weeks based in likely effect of the delaying event. [The Architect must award this (or another period if there are other factors) within 12 weeks [JCT05]]

The extra prelims are the additional costs incurred as a result of the event at the time.  This is important.  It is not necessary to use a formula for extended prelims if the actual cost can be calculated.

eg prelims are £120,000 for a 20 week project, making £6000 per week.  It is tempting to say that the prolongation cost of the event is 3 weeks x £6000 = £18000.   This is not necessarily correct.  £6000 is only the average rate.

The question is, what were the additional expenses in the 3 weeks from 1st March?  You could have an setting-out engineer at £2000 per week and excavators stood idle at £2500 per week. These wouldnt be there later in the project.  Add these to the other prelim costs and the 3 week period in March might cost much more than £18,000.

The cost of the piling will not be determined by BQ rates as the Bill won't contain any - it wasn't part of the scope.

The value in this case will be the nett cost plus an allowance for overheads and profit.

Generally, there are 4 ways of valuing varations, in this order....

1) Bill rates

2) Rates derived therefrom

3) Market value

4) Daywork (or cost-plus)

So heres the buildup of the final value

Credit for strip foundations not installed - (Bill rates and measure)

Piling (Cost plus)

Standing time for operatives / plant (daywork)

Prolongation (cost in that 3 week period) NO Profit - Prolongation cost is a restitution, not a value - only costs recovered

Clear as mud, yes?