Getting Paid For Variations

This week’s ‘Wise Up Wednesday’ is about getting paid for variations.

The lack of proper valuation and non-payment of variations is one of the greatest challenges for Specialist Sub-Contractors and it is therefore important to have a clear understanding of the contractual framework governing the instruction, execution and valuation of variations.

At some stage the work is going to change, and these changes will need to be instructed, implemented, measured, valued and paid for.

And although it’s usually the last bit that causes us to get stressed, you can smooth the path to payment by getting all the other elements right.

WHAT IS A VARIATION?

Standard forms of contract and sub-contract tend to define the term ‘variation’ in a similar way.  However, you need to be aware that there are a considerable number of standard forms and many different ways of dealing with variations.

And most importantly Main Contractors own terms, and amendments to standard Forms, will almost always be onerous. So, please take care to ensure that you are familiar with and understand the provisions in each particular contract.

ESSENTIALS

At their most fundamental level, the are two essentials which you should observe when dealing with variation instructions.

  1. Check whether or not the person purporting to have authority to issue variation instructions actually has authority to do so, and
  2. Comply with the particular requirements of the contract in respect to instructions.

It is not uncommon for various parties to assume that they have authority to issue instructions when in fact they have no such authority. Check the terms of the contract and if it is not clear clarify the matter from the outset.

MAXIMISING RECOVERY FROM VARIATIONS

Variations are an opportunity for the Specialist Sub-Contractor to maximise his financial return from the project.

Please remember the old adage “if you don’t ask you don’t get” and in practice variations should be valued by the Specialist Sub-Contractor.

You need to submit details as soon as possible after the variation arises. This will avoid situations where the person commissioning the work has not been properly advised as to the increased value that has arisen because of the changes he has instigated and may have insufficient funds to pay for them.

PUTTING IT ALL TOGETHER – WANT TO KNOW MORE?

You need to know how to put all this together to make sure you get paid, and protect your company’s financial well being.

So, please come  and discover the Secret Keys To Minimise Risk and Maximise Profit (including those from variations), that we have been putting into practice on behalf of Specialist Subcontractors for the last 27 years.

And they’re are being revealed at our March events;

“Understand Your Contract to Minimise Risk and Maximise Profit”

“Introduction To Contractual Awareness and Using JCT Subcontracts”

WHEN/WHERE IS IT? The dates and fast access venues are as follows;

15 March – Oulton HallLeeds close to M1 and M62

22 March – The Nottingham BelfryNottingham close to M1 J26

29 March – The Village HotelCoventry close to M6 and M40

WHAT DOES IT COVER?

We will be unlocking the Secrets To Getting Paid on time every time in a straightforward down to earth easy to follow style using real life examples.

Here’s what your fellow Subcontractors said about our last event;

“Easily digestible information delivered in an interesting and easy to understand format”

“Very detailed and informative”

“Very informative and well delivered”

“We were struggling to get paid; not any longer!”

THE HEADLINES

  • Session 1 – Contract Formation
  • Session 2 – Introduction to JCT Contracts and Construction Act
  • Session 3 – Time, Notices and Delay and Disruption
  • Session 4 – Instructions, Variations and Maximising Return
  • Session 5 – Getting Paid On Time and the Right Amount
  • Session 6 – Resolving Conflicts and Disputes
  • Session 7 – Putting It All Together

WHO SHOULD ATTEND? This is exclusively for Specialist Contractors and is designed specifically to provide a broad appeal for Specialist Contractors staff who work with contracts which includes;

  • Estimators,
  • Contracts Managers;
  • Project Managers;
  • Commercial Managers,
  • Quantity Surveyors,
  • Credit Controllers and
  • Directors

WHAT WILL WE GET OUT OF IT? The Secrets To Getting Paid! Specialist Contractors don’t get paid because they don’t understand the contract or don’t apply it when they should. We will reveal all you need to know to enable you to understand the fundamentals of those subcontracts, and how to get paid.

WHAT DOES IT COST? You can book now for preferential discounts and rates – but be quick to ensure you receive your Early Booking Discount!

Book within the next few days and instead of paying £350, you can pay just £315.00 saving you 10% off the standard price.

Book two or more places and you can pay just £280 each saving you 20% off the standard price.

Special rates apply for our Buddies (members) – please ask Tanya for details.

All rates are subject to VAT 

Booking couldn’t be simpler, just contact Tanya directly on 01773 712116 or tanya@streetwisesubbie.com to confirm your places and she will take care of the rest. She is brilliant!

But hurry our last round of seminars sold out very quickly. We look forward to seeing you there.

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When you’re not getting paid in construction, when is the problem not about payment?

Don’t confuse the two…

Question: When you’re not getting paid, when is the problem not about payment?

Answer: When it’s a dispute about valuation.

The two things are interconnected but they are not the same!

They are different problems that require different solutions.

Reasons for under valuation in construction

There are a wide range of reasons why you might not be getting paid properly, but the most common are the under valuation of your account including variations and valuation of the final account.

There are several steps that you can take to avoid under valuation.

First, know your contract: It is important to always check the terms and conditions of your contract and be fully aware of specification of the works, payment terms, variations and extensions of time clauses and adjudication clauses.

Secondly, keep in touch with the Contractor or Client: Always give regular progress updates to Contractors and inform them of any factors that may give rise to variations delays etc. This can be achieved by regular agreed meetings and effective management.

Thirdly, before carrying out any additional work, ensure that you receive written instructions from the Contractor or Client and do not wait until the end of the project to try and get values agreed.

Keep everything: You can never keep too many records. Respond effectively to any verbal requests and ensure that you take pictures of the site, retain email conversations and, importantly, document any reasons for delayed progress.

Please don’t stand for late or underpayment.

Take action!

Remember that problems never resolve themselves.

If your works are not being properly valued, take remedial action early. The sooner you tackle the problem the less impact it is likely to cause, and the sooner you get the money the better.

It’s an old adage but you need to get your money out of the tin before it’s empty!

Try going to the top: If discussions at site level are not addressing a certain issue, then go to someone senior in the Contractor or Client’s business. Senior management is often able to take a broader perspective and this wider view can often help resolve disputes before they escalate.

If you do encounter problems that are not getting fixed, discussing things at an early stage with one of our expert legal advisers can be cheaper and simpler than trying to resolve an escalated dispute further down the line.

Take action to safeguard your business from the catastrophic impact of reduced, late, or non-payment in 2016.

If you don’t then it could cost you your business!

Unscrupulous Contractors use every trick in the book, to reduce and delay payments. Specialist Contractor’s efforts to avoid or rectify this problem often come too late in the process.

Don’t be one of the casualties, take action now.

Download “How To Get Paid” for free right now, and put an end to reduced, late and non-payment!

Whatever level your business is at, and whatever your specialisation I want to encourage you to experience and enjoy a better more profitable, less stressful way.

 

I hope you enjoyed my Wise Up Wednesday email and that it gave you some food for thought, and please don’t hesitate to grab your Free Report at “How To Get Paid” and if you need any help with any of your business problems pick up the phone and give us a call on 01773 712116.