Lumpsum Contract Is contractor entitled for variation in lumpsum contracts?

Yes. Lump sum contract means the contractor has to execute the works for a specified amount fixed in the contract. In a lump sum contract, the contractor is bound to execute works for the completion of the project as detailed in the contract documents; in some cases a bill of quantities will also be included. In either case if a specific work is not detailed in the contract or if alterations are required, then it can be treated as a variation. Examples of variation in lump sum contracts An example of variation in lump sum contract is removal of a building or structure which is not described anywhere in drawings or contract documents. Another example is alteration to the details mentioned such as replacing painting works with tiling. A variation order is required to be obtained from the owner/ Engineer before executing the works. Sometimes a provisional sum will be incorporated in the contract for works which cannot be detailed or enough information are not available at the time of tender. Please visit earlier posts on provisional sums, contingency allowance, day works etc. for more information. Variation provisions are detailed in Clause 51.1 of FIDIC Red Book1987 and Clause 13.1 of 1999 edition.

What is Day Work in Construction Contracts?

Dictionary meaning of Day work is work done that is paid on a daily basis. In construction contracts this term is applied under different contexts. 1. For variations in a lump sum contract, wherein work will be evaluated in accordance with the Day Work Schedule included in the Contract. Daywork rates for material, labor, plant and contractor profits will be mentioned in the contract. In such cases the Contractor should consider supervision charges in his bid that will not be paid separately. Clause 13.6 of FIDIC Red Book can be referred to for claims wherein a daywork schedule is included in the contract. 2. For variation purpose in an item rate contract; when item rates are not available within bill of quantities for extra items to be executed, method of day works can be adopted as an option. How is daywork measured in a lump sum contract? As mentioned in the previous paragraph rates will be included in the contract for material, labor, plant and contractor profits. During execution of the works contractor should submit quotations for Engineers approval. Works can be executed after getting approval in writing from the Engineer. After completion of the works the contractor should submit to the Engineer along with IPC (interim payment certificate) all the invoices, vouchers and receipts of goods, equipments and plant involved in the work.