Valuing Changes

Episode #18

In episode 18 of the Subcontractors Blueprint podcast, Jacob Austin delves into the topic of valuing change. He starts by discussing the different terminology used for changes in various contracts, highlighting the importance of using the correct terminology for each contract. Jacob then outlines some general principles for valuing changes, such as valuing work on the same basis as similar work under the contract and adjusting rates for changes in quality or conditions. He also explains how to handle situations where there is no similar work or benchmarks, and when to resort to a day works or time and cost resource-based price. Throughout the episode, Jacob provides practical advice and insights for subcontractors to ensure fair and accurate valuation of changes in their contracts.

KEY TAKEAWAYS:

  • Different contracts may use different terminology for changes, such as variations, changes, or compensation events. It is important to use the correct terminology specified in the contract you are working under.

  • When valuing changes, it is generally best to follow the same basis for valuing work as any work of the same nature under your contract. This includes using the same rates, scaffolding, attendances, and adjusting for any excluded elements.

  • If the work being added is not similar or identical to existing work, you should still start with the contract rates as a basis for valuing the change and then adjust those rates to suit the change. This may involve adjusting for changes in quality, conditions, or difficulty.

  • If there is no similar rate or one that can be adjusted, a new rate may need to be priced. This should be done in agreement with the contractor and may involve estimating from first principles, considering time, cost, materials, plant, preliminaries, overheads, and profit.

  • Day works or time and cost resource-based pricing is a last resort method for valuing work that cannot be properly measured. It is important to record the work accurately, including details of personnel, equipment, materials, and any site manager involvement, and to get a signed record of the day works from the site manager.

BEST MOMENTS:
"And rather bizarrely, even within the same string of contracts, the JCT manages to have two words for what a change is."

"Just a shame nobody told the rest of the contract." 

"Charging for prelims as part of a change is different and potentially preferable to a loss and expense situation." 

"If you're asked to complete works on a day works basis, you will need to get a signed record."

"It's also worth thinking about if you're pricing a lump sum package, have you given enough rates when you're putting your price together to give an accurate way of valuing any changes?" 

HOST BIO
Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/ 
Instagram - www.instagram.com/qs.zone/ 
www.linktr.ee/qs.zone 

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