Are contractors entitled for variations in lump sum contracts?

Yes. Lump sum contract means the contractor has to execute the works for a specified amount fixed in the contract. In a lump sum contract, the contractor is bound to execute works for the completion of the project as detailed in the contract documents; in some cases a bill of quantities will also be included. In either case if a specific work is not detailed in the contract or if alterations are required, then it can be treated as a variation.

Examples of variation in lump sum contracts

An example of variation in lump sum contract is removal of a building or structure which is not described anywhere in drawings or contract documents. Another example is alteration to the details mentioned such as replacing painting works with tiling. A variation order is required to be obtained from the owner/ Engineer before executing the works.

Sometimes a provisional sum will be incorporated in the contract for works which cannot be detailed or enough information are not available at the time of tender. Please visit our pages on provisional sums, contingency allowance, day works etc. for more information.

Variation provisions are detailed in Clause 51.1 of FIDIC Red Book1987 and Clause 13.1 of 1999 edition.

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4 Replies to “Are contractors entitled for variations in lump sum contracts?”

  1. my contract with the client made on the basis of BOQ rates prepared by the consultant and called as a fix cost contract.
    if the quantity given in the boq less then the executed then can we go for variation ?
    secondly the payment schedule is not justified. the foundation works cost is more the amount given in the schedule.
    another question that consultant was just hired for the drawings only and now the client is reluuctant to cooperate and as they follow the restricted instruction of the consultant. what to do?

    1. In Lump Sum Contract based on BQ:-
      a. BQ facilitates in tendering / Contracting Process.
      b. After the contract BQ becomes Schedule of Rate and is used for valuation of Variation.
      (1) any new / additional work (not given in drawings) falls in the
      category of additional work and dealt under variation.
      (2) Any work beyond pre-established quantity variation limit (+
      or- 5% of BQ Quantities) also dealt under variation.
      c. Works are executed as per specifications and drawings only in case of Fixed Sum Contracts.
      Once rates have been agreed and contract concluded no changes applicable.

  2. Dear Sir / Ma’am,

    We were awarded a lump sum contract but the omission is about 30% of the contract value. Can we opt out of the contract or disagree to the omission and insist the employer to maintain the contract value?

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