Managing Construction Contract Variations: A Contractor's Guide to Adapting to Unexpected Changes

Picture yourself at a construction site as a contractor. You have meticulously planned for asphalt roads based on the contract you signed, and then, out of nowhere, a directive arrives - switch to concrete. What do you do? How can you adapt to this curveball and still succeed in delivering your project?

Many contractors in Nigeria face this exact challenge, and this guide is here to help. In this article, I will share practical steps to not only adapt but thrive when confronted with significant variations.

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Understanding the Minister's Directive

During site visits by the Minister of Works, Engr. Dave Umahi, a groundbreaking decision was made. Contractors were instructed to transition from asphalt to reinforced concrete for federal road construction projects in Nigeria.

The reasoning behind this was crystal clear - to create longer-lasting roads and minimize overall costs. This directive underscores the government's commitment to durable infrastructure, especially in high-traffic areas.

Interestingly, this decision aligns with research findings showing that concrete roads can endure for over 40 years, ultimately resulting in a lower life cycle cost due to reduced maintenance. In contrast, asphalt roads come with higher life-cycle expenses due to frequent repairs and replacements, typically lasting only 10 to 20 years.

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Comparing Concrete and Asphalt Roads

Now, I have provided a quick comparison between concrete and asphalt roads. Check out the table below for a quick overview of their unique features.

Impact on Contractors

As a contractor facing the Minister's directive to shift from asphalt to concrete, here are your realities and challenges:

(a)??? Material and Method Change: The directive signifies a significant shift in materials and construction methods. When you initially signed the contract for asphalt construction, you likely never anticipated such a change. The materials you had planned for asphalt may not work for concrete.

(b)?? Design Modifications: Switching to concrete may necessitate substantial design changes. This includes evaluating load-bearing capacity, drainage systems, and road thickness to accommodate the new material.

(c)??? Calculating Costs: Constructing concrete roads tends to be more expensive than asphalt due to higher material and labour costs. Additional features like noise-reducing textures and improved skid resistance add to the expenses. However, remember that these costs are an investment in long-term durability.

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Recognizing Contract Variations

The Minister's directive constitutes a contract variation. In construction terms, a variation means altering the design, quality, or quantity of works. This can involve adding, omitting, or substituting work, altering the standard of materials, or removing previously executed work.

The switch from asphalt to concrete falls squarely into this definition as it fundamentally changes the materials used in your project.

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Practical Steps for Contractors

So, you have been hit with a directive to transition from asphalt to concrete for your road construction project, which is already underway. Here are eight key steps you can take to manage this variation successfully:

1. Review Your Contract: Carefully examine your contract and locate the variation clause. This section outlines the procedure for handling variation instructions, your obligations, and entitlements concerning variations. Pay particular attention to whether a written instruction from the project owner/federal government is required for the variation to be valid. Do not proceed until you receive a written variation instruction if the contract specifies one!
2. Assess Additional Time and Costs: Determine whether your contract allows for additional time and costs resulting from variations. Quickly assess the extent of additional materials, further designs, and financial estimates required for the shift from asphalt to concrete.
3. Revise Your Programme: If your assessment indicates that the transition will impact your project's completion time, update your project programme accordingly.
4. Submit a Proposal: Prepare and submit a comprehensive proposal to the engineer, including your assessment, revised schedule, and cost estimates. The proposal must highlight the impact of the variation on the project’s cost and timeline. Ensure your request for additional time and costs is data-driven and supported by your assessment results. Seek the expertise of professional engineers to evaluate the feasibility and implications of changing construction materials.
5. Obtain Written Approval: Ensure that the variation is formally documented and approved in writing by you and the project owner/federal government. This written approval should include agreed-upon alterations, cost adjustments, and programme revisions.
6. Document Everything: Keep meticulous records of all communication, including emails, meeting minutes, and signed agreements related to the variation.
7. Implement the Variation: Upon approval, proceed with implementing the changes in accordance with the new plan and timeline. Monitor the project closely to ensure that the asphalt and its incidental materials are integrated successfully. Remember: Wait for a written variation instruction before starting asphalt construction or any variation.
8. Seek Legal Counsel: When in doubt about your obligations and entitlements under the contract, consult legal experts. They can provide clarity on the procedures necessary to secure additional time and costs due to variation, even the federal government's variation instruction.

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Conclusion

In the ever-evolving world of construction, adaptability is the key to success.

The Minister's directive to switch from asphalt to concrete presents challenges but also opportunities for contractors. By following these steps and seeking legal counsel when needed, you can navigate this variation and ensure the successful completion of your project.

Remember, data-driven proposals are your best allies in securing additional time and costs for variations. Stay resilient and continue building the future of Nigeria's infrastructure.