The art of claiming variations
Updated: May 28
Latest update 03/08/2023 | Last update 21/01/2022 | First published 24/10/2019
Written by Aitchison Reid Building and Construction Lawyers, published by TradeBox with permission.
There is an art to claiming variations
You should get paid for the variation work you do. It’s that simple. Yet all too often subbies are left with their hand out long after the work has been completed. Commonly the dispute is variation work. There is an art to claiming variations and in this article we give you four practical tips to put you in the best position for claiming future variations.
1. Know what was included in your original price.
When you tender for a new job, clearly set out what is included in your price. Detail should include a description of the scope, any relevant quantities and how long you expect it will take to complete. Even if it is a lump sum price state what has been allowed for upfront because then when additional work is requested then there is a clear line in the sand of what is variation scope.
2. Even lump sum contracts should include variation rates upfront.
Often builders ask subbies on lump sum jobs to do additional work as “a favour” or “to help them out”. Be ready for these requests from the beginning by including rates with your initial lump sum tender price.
Create your own variation schedule of rates list that you can then include with any lump sum price. This list is for any work you do, even if you do not think it specifically relates to this particular job. If you do provide a variation schedule of rates, ensure your terms and conditions state that any work in addition to the lump sum will be calculated at these rates.
Also check that any subsequent purchase order or subcontract also includes these rates.
3. Paperwork before the work.
Make these four words your mantra – “paperwork before the work”. Don’t lose your leverage. You are in your strongest position BEFORE the work is carried out. Use this time to agree the scope of the variation and request that it be provided in writing before doing the work. Often we hear subbies just “got on with the job” to keep a good relationship with the client, but is it a good relationship if you don’t get paid? No it’s not!
You don’t need to wait for the builder to provide you with written instructions, you can write the variation request and ask the builder to agree it. A variation request or site instruction should include:
Who requested the work;
When the work is required to commence;
Description of the work to be done;
Quantities of required labour, plant and materials;
Rates that apply (either refer to schedule of rates you included in the contract or if none recorded, now is the time to set them out). This includes labour rates, plant hire and materials plus any margin eg. Cost + 5%; and
The additional time the work will take to carry out (this should not be the shortest amount of time the work will take, but the maximum time the variation will take to complete).
4. Getting paid for variation work.
When it comes time to submitting your payment claim / invoice for the variation work, support it with as much documentation as you can. Here are suggestions of the type of paperwork to submit with your claim:
the written instruction for example the site instruction / variation order / email chain;
purchase orders or delivery notes of materials purchased. If it was not a cost plus price, you can redact any $ dollar values because the purpose is to show that the item has been procured, not how much you paid for it;
photos with a date stamp of the work being completed;
drawing revision changes to show the scope of the change; and
daywork sheets signed by the client’s representative or photos of the sign-in register/visitor pass to prove they were on site.
Even proactive subbies can struggle to get paid. The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) can get you paid faster, but only if you act fast too. To check your timeframes under the BIF Act click here.
If you need some legal help and advice, contact your subbie lawyers at Aitchison Reid on 07 3128 0120 or email us at subcontractors@arbuildinglaw.com.au.
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