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5.7. Modifying works contracts

See section 2.10. for general information on modifying contracts.

Where no contract modification is needed

In the vast majority of cases, the works contract stipulates that it is paid by measurement: in such contracts, the quantities indicated in the bill of quantities are estimates, as is the initial contract price derived from these estimated quantities.

  Whenever an application for payment is submitted, the supervisor measures, for each item, the actual quantities of the works executed and calculates the amount due by applying the unit rates.

Increases vis-à-vis the initial contract price which are the sole result of the measured actual quantity exceeding the stated bill of quantities or price schedule do not represent a change of the contract and do not require an administrative order to amend the contract or an addendum.

Likewise, the application of the price revision clause of the contract will have the same effect. Again, since the price revision formula is already agreed upon by the contracting parties in the initial contract, the contract does not need to be amended to allow increases vis-à-vis the initial contract price to deal with their effect.

A contract addendum or administrative order cannot be used to obtain additional works which are not necessary for the completion of the initial contract.

Administrative order

In a works contract, the supervisor has the power to issue an administrative order to change any part of the works if necessary for the proper completion and/or functioning of the works. These changes may include additions, omissions, substitutions, changes in quality, quantity, form, character, kind, position, dimension, level or line and changes in the specified sequence, method or timing of execution of the works. See Article 37 of the General Conditions.

The contractor is bound to make the changes ordered. The contractor cannot delay the works ordered pending a decision on the claim he might have either to extend the period of implementation or for additional payment.

Addendum

Changes to the contract not covered by an administrative order must be formalised through an addendum. For additional works not included in the initial contract which, through unforeseen circumstances, become necessary for carrying out the contracted works, an addendum can be concluded under the conditions given in point 5.2.5.1. b).

An addendum must be issued when the change entails an increase or reduction of the total value of the  works in excess of 15 % of the initial contract price.

INDIRECT MANAGEMENT WITH EX-ANTE CONTROLS:

If additional EU financing is sought, it must be endorsed by the European Commission before any commitment is made by the contracting authority.

The total period of execution of a works contract includes the period of implementation of the works and the defects liability period between provisional and final acceptance. During this time, the period(s) of implementation can be extended by administrative order or by contract addendum, even after the implementation period specified in the contract has expired.

A works contractor is committed to completing the works, and the contracting authority is committed to paying for the certified works. These commitments and the contract remain valid even if the contractor fails to complete the works within the period(s) specified in the contract, the consequence being that liquidated damages for delay can be deducted from the amounts due.



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