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How to Value a JCT Variation
How do I value a JCT Variation from the bill and record it until the contract sum moves?
Log the Instruction as a notice, then create a request from it with a bill of its own that holds only the changed scope. Price it at the bill's rates, then add overheads and profit at 5% each: 96 m² at £55 plus two doorsets at £760 is £6,800 net, so the Variation is worth £7,480. Approve it, turn it into an order linked to the JCT contract, start and complete it, and the contract's current value rises by £7,480. The app knows no JCT Valuation Rules, has no field for the Instruction reference, and records an extension of time on the Variation only.
We record an architect's instruction and work through the valuation of a variation in OpenConstructionERP. The example connects the changed scope, quantities, rates and supporting records with the review and agreement of the order.
You will produce
A Variation for two meeting rooms priced from the bill at £7,480 (£6,800 net plus 5% overheads and 5% profit), approved, completed and added to the contract's current value.
Sources
- JCT contract
Transcript
0:00 The rules
This lesson is about valuing a change on a JCT job. You'll see what makes an instruction a Variation, and price it from the bill. Then you'll record it in the app until the contract sum moves. The architect adds two meeting rooms, worth £7,480 on Tandlewick's bill. Price them at net rates alone, and Tandlewick gives away £680. By the end, you'll value a Variation from the bill. Last time, Tandlewick's QS paid Haughmoor, net of CIS. Now the architect wants two more meeting rooms on level 2. This change passes through four roles. The architect instructs, Tandlewick's QS prices, the client's QS values, and the site manager confirms the work. The architect's Instruction changes the design and the quantity of the work. Under the JCT contract, that's a Variation. Unless a price is agreed first, the client's QS values it under the contract's Valuation Rules. Measurable work starts from the rates in the bill. Tandlewick's QS prices it from those rates, so the client's QS can check it. 96 m² of partitions at £55 is £5,280. Two doorsets at £760 is £1,520. That's £6,800 net. The bill carries overheads and profit at 5% each, so add £680. The Variation is worth £7,480. No preliminaries here: the rooms cause no delay, and the site runs as before. These rooms cost no time. But if progress is, or is likely to be, delayed, notify it straight away. The architect then has 8 weeks from your full particulars to decide whether to fix a later Completion Date. And if regular progress is materially affected, you may claim loss and expense. Both have their own notice rules.
2:14 Log and price
In OpenConstructionERP, open Variations, under Change in the sidebar. The page has tabs for Notices, Requests and Orders. The app has no JCT wording here, so log the Instruction as a notice. Click New Notice. Title it with the Instruction's reference and what it changes. Say who it goes to, and when you want a reply. Create it. The notice is on the list, with its reply date. Now a new request, from that notice. The app prices a Variation on a bill of its own, holding only the changed scope. Open it from the tender: tick the partitions and the doorsets, and type the new quantities, 96 m² and two. Both lines arrive at the bill's rates. Then overheads and profit, 5% each, on the direct cost. The priced total is £7,480.
3:13 Agree and order
Submit it. The client's QS values it the same way and agrees. Record that: approve the amount that was submitted. If you settle on a different figure, approve a negotiated amount instead, and note why. Now turn it into an order, and pick the contract it amends: the JCT contract from lesson three. Its title names the form, because the app has no JCT 2024 template, and its 2016 one sets no dates or retention. The app says why the link matters: only a linked order moves the contract's current value. A QS would call that the adjusted contract sum. Open the order, and start it. Later, the site manager confirms the rooms are built. Complete the order. Now open the contract. Agreed variations reads £7,480, and the current value has gone up by exactly that. The app leaves three things to you. It copies the bill's rates, but it knows no JCT Valuation Rules. Whether a rate still fits, and which percentages apply, is your call. It has no field for the Instruction, so its reference goes in the title. And a granted extension of time is recorded on the Variation only, so keep the contract's completion date yourself.
4:35 Get it right
Here are two mistakes we see. One: pricing at net rates only. Leave off the bill's overheads and profit, and Tandlewick gives away £680. Two: leaving changes to the final account. Value each one as it happens, while the records are fresh. Pro tip. Keep a variation register from day one: reference, date received, value submitted, value agreed. Walk through it with the client's QS every month. Pause the video. The architect adds a third room: 48 m² of partitions and one doorset. What's the Variation worth? The answer: £3,740. 48 m² at £55, plus one doorset, plus 10%. Here's your checklist, and the series pack: all six checklists, in the description. That's the series: a tender priced, a package let, a valuation, notices, a payment, and a change. Remember, OpenConstructionERP is free and open source, and it runs on your own server. No subscription, no per-seat licence.
