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    A SHORT NOTE ON VARIATIONS UNDER FIDIC 87, FIDIC 99 and FIDIC 2017

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    A SHORT NOTE ON VARIATIONS UNDER FIDIC 87, FIDIC 99 and FIDIC 2017

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    Design Group
    16 views6 pages

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    A SHORT NOTE ON VARIATIONS UNDER FIDIC 87, FIDIC 99 and FIDIC 2017

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    A SHORT NOTE ON VARIATIONS UNDER FIDIC 87, FIDIC 99 and FIDIC 2017

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    Design Group

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    © All Rights Reserved
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    of 6

    A SHORT NOTE ON

    VARIATIONS UNDER
    FIDIC 87, FIDIC 99 and
    FIDIC 2017

    Mirza Shahid Baig m_shahidbaig@yahoo.com


    1

    VARIATION MANAGEMENT UNDER FIDIC Red Book


    Variations, which refer to changes or modifications to the scope of work under a
    construction contract, are an essential part of managing construction projects. FIDIC
    contracts provide detailed procedures for handling variations. Variations are a crucial part
    of construction contracts, allowing for adjustments to the project scope to accommodate
    changes that arise during the course of work. The FIDIC contracts provide detailed procedures
    for handling variations. Here's a comparative analysis of the variation clauses under FIDIC 87,
    FIDIC 99, and FIDIC 2017:

    FIDIC 87

    Background:

     Known as the "Conditions of Contract for Works of Civil Engineering


    Construction."
    Authority to Instruct Variations:

     The Engineer has the authority to instruct variations to the works at any time
    before issuing the Taking-Over Certificate.

    Types of Variations:

     Changes in the quantities of any item of work.


     Changes in the quality and other characteristics of any item of work.
     Changes to the levels, positions, and dimensions of any part of the works.
     Omission of any work.
     Additional work or changes to the sequence or timing of the works.

    Procedures for Variations:

     Instruction by Engineer: The Engineer has the authority to issue instructions for
    variations to the works at any time before the issuance of the Taking-Over
    Certificate.
     Variation Orders: These instructions are formally issued as Variation Orders.
     Contractor’s Obligation: The contractor is obligated to comply with these
    instructions.

    THE FIDIC RED BOOK


    MIRZA SHAHID BAIG
    CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND
    M_SHAHIDBAIG@YAHOO.COM
    ENGINEERING WORKS DESIGNED BY THE EMPLOYER,
    2

     Valuation of Variations: The contract provides methods for valuing variations,


    typically based on agreed rates or, if not applicable, through a fair valuation by
    the Engineer.
     Notification and Agreement: The contractor is required to notify the Engineer if
    they believe a variation order will result in additional costs or require an
    extension of time. The Engineer then assesses the impact and decides on
    adjustments to the contract price and schedule.

    Key Features:

     Relatively straightforward and traditional approach to managing variations.


     Significant role of the Engineer in instructing and valuing variations.
     Emphasis on fair valuation and mutual agreement between the parties.

    FIDIC 99

    Background:

     Known as the "Conditions of Contract for Construction for Building and


    Engineering Works Designed by the Employer."
    Authority to Instruct Variations:

     The Engineer has the authority to instruct variations at any time prior to the
    issuance of the Taking-Over Certificate.

    Types of Variations:

     Changes to the quantities of any item of work.


     Changes to the quality and other characteristics of any item of work.
     Changes to the levels, positions, and dimensions of any part of the works.
     Omission of any work.
     Additional work or changes to the sequence or timing of the works.

    THE FIDIC RED BOOK


    MIRZA SHAHID BAIG
    CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND
    M_SHAHIDBAIG@YAHOO.COM
    ENGINEERING WORKS DESIGNED BY THE EMPLOYER,
    3

    Procedures for Variations:

     Variation Instruction: The Engineer can issue instructions requiring a variation,


    and these instructions are formalized as Variation Orders.
     Contractor’s Proposal: The contractor can also propose variations, but they
    require the Engineer’s approval.
     Valuation of Variations: Similar to FIDIC 87, variations are valued based on
    agreed rates or, if these do not apply, through a fair valuation by the Engineer.
    The 1999 edition provides more detailed guidance on how to assess and value
    variations.
     Notice and Impact Assessment: The contractor must promptly notify the
    Engineer if they consider a variation will result in additional cost or time. The
    Engineer then evaluates and decides on any necessary adjustments to the
    contract price and completion date.
     Dispute Resolution: The introduction of the Dispute Adjudication Board (DAB) in
    FIDIC 99 provides a structured method for resolving disagreements regarding
    variations.

    Key Features:

     More detailed procedures and clearer guidance on managing and valuing


    variations.
     Inclusion of the DAB to help resolve disputes over variations.
     Enhanced role of the Engineer in assessing the impact of variations on cost and
    time.

    FIDIC 2017

    Background:

     The latest edition, published in December 2017, reflecting modern industry


    practices and improved clarity.
    Authority to Instruct Variations:

     The Engineer can issue instructions for variations at any time before issuing the
    Taking-Over Certificate.

    THE FIDIC RED BOOK


    MIRZA SHAHID BAIG
    CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND
    M_SHAHIDBAIG@YAHOO.COM
    ENGINEERING WORKS DESIGNED BY THE EMPLOYER,
    4

    Types of Variations:

     Changes in the quantities of any item of work.


     Changes in the quality and other characteristics of any item of work.
     Changes to the levels, positions, and dimensions of any part of the works.
     Omission of any work (unless it is to be carried out by others).
     Additional work or changes to the sequence or timing of the works.

    Procedures for Variations:

     Variation Instruction: The Engineer can issue instructions for variations. The
    2017 edition provides even clearer and more detailed procedures for issuing and
    managing variations.
     Contractor’s Proposal: The contractor can propose variations, but they need the
    Engineer’s approval.
     Valuation of Variations: Detailed and explicit procedures for valuing variations.
    The contract emphasizes pre-agreed rates and prices, and if these are not
    applicable, a fair valuation is conducted by the Engineer. The 2017 edition offers
    more comprehensive guidelines on how to value variations.
     Advance Notification and Evaluation: The contractor is required to notify the
    Engineer in advance if a proposed variation is likely to affect the contract price or
    completion date. The Engineer must then evaluate the notification and provide a
    timely decision on any adjustments.
     Engineer’s Determination: The Engineer is required to make a formal
    determination on the variation's impact on the contract price and schedule,
    following a transparent and structured process.
     Dispute Avoidance/Adjudication Board (DAAB): The DAAB, an evolution from
    the DAB, is involved from the beginning and helps proactively manage disputes,
    including those related to variations.

    Key Features:

     More structured and transparent procedures for managing variations.


     Emphasis on early notification and proactive management of the impacts of
    variations.
     Comprehensive guidelines on valuation of variations.

    THE FIDIC RED BOOK


    MIRZA SHAHID BAIG
    CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND
    M_SHAHIDBAIG@YAHOO.COM
    ENGINEERING WORKS DESIGNED BY THE EMPLOYER,
    5

     Enhanced role of the DAAB for dispute avoidance and resolution.

     Summary of Variation Clauses Comparison

    Feature FIDIC 87 FIDIC 99 FIDIC 2017


    Authority to
    Instruct Engineer Engineer Engineer
    Types of Changes in quantities, Changes in quantities, Changes in quantities,
    Variations quality, levels, etc. quality, levels, etc. quality, levels, etc.
    Instruction Variation Orders issued Variation Orders issued Variation Instructions issued
    Process by Engineer by Engineer by Engineer
    Contractor Contractor can propose, Contractor can propose,
    Proposals Limited provisions needs approval needs approval
    Contract rates or fair Contract rates or fair Detailed procedures, contract
    Valuation valuation by Engineer valuation by Engineer rates, fair valuation
    Notification and Contractor notifies Detailed notice and Advance notification and
    Impact Engineer evaluation procedures formal determination
    Dispute Engineer’s decision, DAAB for proactive dispute
    Resolution then arbitration DAB, then arbitration management
    Highly detailed and
    Procedural Detail Basic More structured structured

    Conclusion

    The FIDIC Red Book has evolved significantly from the 1987 edition through the 1999
    and 2017 editions, with each new version providing more detailed and structured
    procedures for managing variations. The 2017 edition, in particular, offers a modern and
    comprehensive approach, emphasizing early notification, structured valuation, and
    proactive dispute management through the DAAB. These changes reflect the industry's
    growing complexity and the need for clear, transparent, and fair management of
    variations in construction contracts.

    THE FIDIC RED BOOK


    MIRZA SHAHID BAIG
    CONDITIONS OF CONTRACT FOR CONSTRUCTION FOR BUILDING AND
    M_SHAHIDBAIG@YAHOO.COM
    ENGINEERING WORKS DESIGNED BY THE EMPLOYER,

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