Construction Variations & Cost Substantiation Training Course

Course Overview

Learning Objectives

• Distinguish a true variation from original scope, a claim, or corrective work, using the contract documents and the instruction received.
• Apply the FIDIC 1999 and 2017 variation and valuation provisions, and comparable bespoke clauses, to pricing decisions, and record the reasoning behind each one.
• Select the correct valuation method in order: contract rates, pro-rata rates, and new rates, with daywork where the contract provides for it.
• Build new rates from first principles using labor, plant, material, subcontract, overhead, and profit elements, with each assumption stated openly.
• Substantiate each cost element with payroll data, plant records, purchase orders, invoices, and subcontract accounts.
• Value omissions, substitutions, and changes in quantity, including their effect on rates and on lost profit.
• Assess the time-related preliminaries, wastage, and productivity costs that a variation legitimately causes.
• Evaluate the cumulative impact of multiple small variations on unchanged work and overall productivity, and reserve the right to recover that cost.
• Test subcontractor quotations and supplier prices for competitiveness, scope match, and evidence of actual cost.
• Conduct open-book reviews and cost audits with a clear, documented, and fair method of verification.
• Prevent double recovery across variations, claims, interim payments, and the final account, by tracing each item to one source.
• Maintain a variation register and substantiation file that supports timely agreement and final account closure.
• Prepare negotiation positions on variation values that rest on evidence, with clear fallback positions and defined authority to settle.

Who Should Attend

Learning Outcomes

• By the end of this course, participants will be able to:
• Determine whether a change is a true variation, original scope, a claim, or corrective work.
• Apply FIDIC 1999 and 2017 variation and valuation provisions to a pricing decision.
• Choose and justify the right valuation method for each varied item of work, and explain that choice to a reviewer.
• Build a new rate from first principles with labor, plant, material, overhead, and profit.
• Assemble the payroll, plant, purchase, and invoice evidence that substantiates a price, with every figure traceable to its source document.
• Value omissions and quantity changes, including any justified effect on rates and profit.
• Price the time-related, productivity, and cumulative effects that a variation really causes, without overlapping other heads of cost.
• Test subcontractor quotations for competitiveness, scope match, and evidence of cost.
• Carry out a fair open-book review or cost audit, and record its results clearly, including items accepted, adjusted, and rejected.
• Identify and remove double recovery across variations, claims, and payments.
• Prepare a negotiation position supported by evidence, and record the settlement reached.
• Keep a variation register that supports interim payments and final account closure.

Course Outline