The International Association of Dredging Companies (IADC) has just released their latest article named ‘Valuing Variations In Dredging Contracts’.
Variations have the potential to generate substantial extra costs and pose significant delay and disruption to a dredging project. Moreover, the valuation of a variation can be a contentious issue between contracting parties, the article said.
Often the engineer has an obligation under the terms of the contract to value any varied work.
Where appropriate the engineer should apply the contract rates, such as where the work executed under the variation is of a similar nature and carried out under similar conditions to work set out in the contract, according to the article.
The issue for the engineer in valuing a variation is usually the extent to which the varied work matches the character of that in the original contract rates and prices.
With respect to the costs of dredging, as these are capital intensive, the discussion on how to value varied works almost always turns to the valuation of the cost of the vessel itself.