1st edition, guidance note Valuing change

1 Practice Standards, UK1st edition , guidance noteValuing change1st edition , guidance noteThis guidance note summarises what is meant by change and howit is valued under JCT, NEC and FIDIC forms of contract . change is given specific definition within standard forms of contract ,for example a Variation, change of Employer s Requirements or aCompensation Event. Each of these terms is explained in thedefinition section of the relevant contract is given for each of the main groups of contracts andthe forms in most regular use within those groups, under thefollowing headings which map to the Assessment of ProfessionalCompetence (APC): General Principles (Level 1: Knowing) Practical Application (Level 2: Doing) Practical Considerations (Level 3: Doing/Advising).

2 Valuing change GN 58/2010 Valuing changeRICS guidance note1st edition (GN 58/2010)Published by the Royal Institution of Chartered Surveyors (RICS)Surveyor CourtWestwood Business ParkCoventry CV4 responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication canbe accepted by the authors or by the Built Environment Professional Group of the Royal Institution of Chartered 978 1 84219 Royal Institution of Chartered Surveyors (RICS) May 2010. Copyright in all or part of this publication rests with RICS, and save by prior consent ofRICS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying or otherwise, now known or to be by Columns Design Ltd, Reading, BerksContentsRICS guidance notes1 Introduction3 General principles.

3 Level 1 JCT Standard Building contract without JCT Standard Building contract with JCT Standard Building contract with Approximate JCT Intermediate Building JCT Minor Works Building JCT Design & Build JCT Major Project Construction JCT Intermediate Building contract with Contractors JCT Minor Works Building contract with Contractors NEC Option A Priced contract with Activity NEC Option B Priced contract with Bills of NEC OptionC TargetContract with Activity NEC OptionD TargetContract with Bills of NEC Option E Cost Reimbursable NEC Option F Management FIDIC Conditions of contract for FICIC Conditions of contract for Plant and Design-build10 Practical application.

4 Level 2 JCT Standard Building contract Without JCT Standard Building contract With JCT Standard Building contract With Approximate JCT Intermediate Building JCT Minor Works Building JCT Design & Build JCT Major Project Construction JCT Intermediate Building contract with Contractors JCT Minor Works Building contract with Contractors NEC Option A Priced contract with Activity NEC Option B Priced contract with Bills of NEC OptionC TargetContract with Activity NEC OptionD TargetContract with Bills of NEC Option E Cost Reimbursable NEC Option F Management FIDIC Conditions of contract for FIDIC Conditions of contract for Plant and Design-Build18 Valuing change | iiiPractical considerations: Level 3 Changes in Changes of Valuing General considerations20iv | Valuing CHANGERICS guidance notesThis is a guidance note.

5 It provides advice tomembers of RICS on aspects of the procedures are recommended for specificprofessional tasks, these are intended to embody best practice , that is, procedures which in theopinion of RICS meet a high standard ofprofessional are not required to follow the advice andrecommendations contained in the guidance should, however, note the following an allegation of professional negligence ismade against a surveyor, the court is likely to takeaccount of the contents of any relevant guidancenotes published by RICS in deciding whether or notthe surveyor has acted with the opinion of RICS, a member conforming tothe practices recommended in this guidance noteshould have at least a partial defence to anallegation of negligence by virtue of having followedthose practices.

6 However, members have theresponsibility of deciding when it is appropriate tofollow the guidance . If it is followed in aninappropriate case, the member will not beexonerated merely because the recommendationswere found in an RICS guidance the other hand, it does not follow that amember will be adjudged negligent if he or she hasnot followed the practices recommended in thisguidance note. It is for each individual charteredsurveyor to decide on the appropriate procedure tofollow in any professional task. However, wheremembers depart from the good practicerecommended in this guidance note, they shoulddo so only for good reason.

7 In the event oflitigation, the court may require them to explain whythey decided not to adopt the addition, guidance notes are relevant toprofessional competence in that each surveyorshould be up to date and should have informedhim or herself of guidance notes within areasonable time of their change |1 AcknowledgmentsRICS would like to thank the following for their contributions to this guidance note:Lead authorAndrew Smith (Laing O Rourke)ContributorsStuart Earl (Gleeds)Michelle Murray (Turner & Townsend)Daniel Alcon (Currie & Brown)Graeme Seage (Mace)Jamie Hillier (Kier)Colin Foster (Balfour Kilpatrick)Alpesh Patel (APC Coach)2| Valuing CHANGEI ntroductionThis guidance note summarises what is meant by change and how it is valued under JCT, NEC andFIDIC forms of contract .

8 It does not seek to coverevery form within these families, but covers rulesand procedures from the most regularly the purposes of giving guidance , it is assumedthat a valid change has occurred, and thedocument does not attempt to deal withdemonstrating entitlement to a is given specific definition within standardforms of contract , for example a Variation, Changeof Employer s Requirements or a CompensationEvent. Each of these terms is explained in thedefinition section of the relevant contractconditions. They will all have a common theme andbe associated with Valuing either:+the carrying out of a different scope of work(addition or omission)+the effect of carrying out the same scope ofwork in a different manner (timing, conditions,etc).

9 guidance is given for each of the main groups ofcontracts and the forms in most regular use withinthose groups, under the following headings whichmap to the Assessment of ProfessionalCompetence (APC):+General Principles (Level 1: Knowing)+Practical Application (Level 2: Doing)+Practical Considerations (Level 3: Doing/Advising).Minimum level of serviceThe quantity surveyor is expected to fulfil thefollowing duties, notwithstanding the detailed termsof any appointment or contractual obligation:+Review the scope of the change and quantify it,in accordance with the provisions of theconstruction contract .+Review documents submitted to the client, by acontracting party, which are intended torepresent a quotation or valuation of changeunder the construction contract .

10 +Prepare a valuation of the change , inaccordance with the construction contract ,where there is a requirement to do change |3 General principles: 1 (Knowing) guidance is given within this section in respect ofthe main forms of contract currently in use. There islittle difference between these forms and theirpredecessors, however, the reader is advised tocheck the precise wording if working with earlierversions or forms that are not specifically reviewedin this guidance are many consistent principles of valuingchange across the range of contracts. Most formsof lump sum contract , a contract which isneither measured as the works proceed nor basedon a cost reimbursable arrangement, have somecommon basic principles:+Additions to, and omissions from, contractedworks are valued by quantifying the change ofscope and using rates and/or prices foridentical or similar work as the basis ofvaluation.