Change Control

Section 1

Purpose

Note on JCT editions: JCT has published the 2024 Edition. This guidance cites JCT SBC/Q 2016 clause references; the commercial and payment mechanisms are substantively unchanged in the 2024 edition, but specific clause references should be verified against the contract edition in use on any given project.

Change control is the formal process of identifying, evaluating, instructing, valuing, and documenting every change to the contracted scope of works during the construction phase. Variations are almost inevitable on all but the simplest projects; the QS's responsibility is to ensure that every change is properly instructed before work commences, valued using the correct contractual methodology, and recorded immediately in the variation register and the Forecast Final Cost. Uncontrolled variations — changes to scope instructed informally or without the QS's involvement — are the single most common cause of cost overruns and disputed final accounts.

RICS Change Control and Management (1st edition, effective 1 April 2021) distinguishes between a 'change' (any event that may affect cost, programme, or quality) and a 'variation' (a formally instructed change to the contracted works). Not every change event requires a formal instruction; not every instruction constitutes a variation entitling the contractor to additional payment. The QS must advise the client and CA/PM on which events give contractual entitlement before any work is instructed, and must ensure that the client has approved the cost implication before the instruction is issued.

The valuation methodology for changes depends on the contract form: under JCT SBC/Q 2016, variations are valued using contract BQ rates first, then analogy rates, then star rates agreed between the parties, and daywork only as a last resort. Under NEC4, compensation events are assessed at defined cost (actual or forecast) plus the fee. Under FIDIC, clause 12 remeasurement and clause 13 variation rates apply. Irrespective of contract form, all valuations must be agreed progressively throughout the construction phase — leaving the bulk of variation agreement to the final account stage significantly increases the risk of disputes.

Section 2

Key Principles

RICS Change Control and Management (1st edition, effective 1 April 2021): seven-step change control process; change vs variation distinction; risk allocation under JCT, NEC4, and FIDIC; variation register and change board requirements; BIM and change management.
RICS Valuing Change (current edition): variation valuation hierarchy — contract rates, analogy rates (fair rates for analogous work), star rates (new rates agreed for novel work), daywork (last resort only); assessment of omissions; loss and expense as a separate element.
JCT SBC/Q 2016, Clauses 5.1–5.9: definition of variation (alteration or modification of design, quality, or quantity; addition or omission of obligations); valuation rules; Schedule 2 quotation procedure (contractor quotation within 21 days; QS assessment within 7 days; client acceptance within 7 days).
NEC4 Engineering and Construction Contract, Clause 60.1: 21 defined compensation events; Clause 61.3: eight-week notification time bar — failure by the contractor to notify within 8 weeks of awareness of a compensation event forfeits entitlement; PM must assess within 2 weeks of contractor's quotation.
JCT SBC/Q 2016, Clause 5.6 — Daywork: daywork is applicable only where a variation cannot be properly valued by measurement; daywork rates are the contractor's tendered percentages on top of prime cost; the daywork percentage for labour, materials, and plant must be separately confirmed from the pricing schedule.
HGCRA 1996 and common law: verbal instructions are technically capable of forming valid contracts; in practice, verbal variation instructions create evidential problems; all instructions must be confirmed in writing before work proceeds to protect the employer's ability to challenge the scope and value of any variation.

Section 3

Practical Application

Step 1

Capture all potential changes: any event that may affect cost, programme, or quality must be captured on a Change Request Form before any work commences. Do not allow the design team or client to instruct work informally without involving the QS. Assess the potential cost and programme impact before the instruction is issued and confirm that the client has approved the additional expenditure.

Step 2

Issue formal instruction: the CA/EA issues a written instruction in the required form (Architect's Instruction or Engineer's Instruction, as applicable). The instruction must identify the clause under which it is issued (e.g., JCT SBC/Q Clause 3.14 — variation; Clause 2.15 — statutory change). Never allow verbal instructions — all instructions must be in writing before work proceeds.

Step 3

JCT Schedule 2 quotation procedure: where time permits, use the quotation procedure rather than post-instruction valuation. Issue a quotation request to the contractor, specifying the scope of the proposed instruction and requesting a lump-sum quotation including any programme impact. The contractor has 21 days to submit; the QS has 7 days to assess; the client has 7 days to accept or reject. An accepted Schedule 2 quotation becomes the agreed value and cannot be revisited.

Step 4

Value using the correct hierarchy: (i) Contract BQ rates — apply where the work is the same character and conditions; (ii) Analogy rates — derive from contract rates where the work is similar but not identical; (iii) Star rates — agreed new rates for work of a different character or under materially different conditions; (iv) Daywork — only where the work cannot be properly valued by measurement. Document the basis for the valuation method chosen.

Step 5

NEC4 compensation events: the contractor must notify a compensation event within 8 weeks of becoming aware of it (Clause 61.3). If the contractor fails to notify within 8 weeks, the event is treated as if it were not a compensation event and the contractor forfeits all entitlement. The PM assesses the compensation event and notifies the contractor. If the PM fails to assess within 2 weeks, the contractor's quotation is deemed accepted.

Step 6

Update the variation register: record every variation with a sequential reference number, instruction reference, brief scope description, valuation status (instructed / quoted / assessed / agreed), and current value. Update the register immediately when any variation is instructed or agreed. The variation register is a live document — it must reflect the current position at all times.

Step 7

Update the Forecast Final Cost: update the FFC immediately when a variation is instructed (at assessed value) and again when it is agreed (at agreed value). Do not wait for variations to be agreed before including them in the FFC — the FFC must always reflect the current cost position including all instructed changes.

Step 8

Progressive agreement: agree variations progressively throughout the construction phase — do not leave large volumes of unagreed variations to the final account stage. Schedule regular variation agreement meetings with the contractor's QS. By Practical Completion, the target is for all variations to be agreed or at least assessed, with only genuinely disputed items remaining.

Section 4

Common Mistakes to Avoid

Allowing verbal instructions — verbal instructions are the single most common cause of scope disputes in final account negotiations; all instructions must be in writing before work proceeds.
Instructing changes without client authority for the additional cost — the QS must confirm the client has approved any cost implication before the instruction is issued; retrospective approval often does not come, leaving the QS with a professional liability.
Missing the NEC4 eight-week compensation event notification time bar — once the time bar expires, the contractor loses all entitlement to time and money for that event; the PM must actively remind the contractor of approaching time bars.
Defaulting to daywork for variations that could properly be valued by measurement — daywork is the most expensive valuation method; contract rates must be applied first; daywork should only be used where measurement is genuinely impossible.
Leaving the bulk of variation agreement to the final account stage — unagreed variations at project end are the primary cause of protracted final account negotiations; progressive agreement throughout construction is mandatory.

Section 5

APC Competency & Quick Reference

APC Competencies: Contract Administration (L3) | Commercial Management (L2) | Legal & Regulatory Compliance (L2) | Procurement & Tendering (L1)

What are the three methods of valuing a JCT variation and in what order must they be applied?

Under JCT SBC/Q 2016 Clause 5.6–5.7: (1) Contract BQ rates — apply where the work is of similar character, quality, and quantity under similar conditions; (2) Analogy rates — derived from contract rates by fair adjustment where work is similar but conditions differ; (3) Star rates — new rates agreed between the parties where the work is of a fundamentally different character. Daywork (Schedule 7) applies only where work cannot be properly valued by measurement; the contractor's tendered daywork percentages are applied to prime cost. Omissions are valued at contract rates without adjustment. The valuation hierarchy must be applied in order — jumping to daywork where contract rates apply is not permissible.

What is the NEC4 compensation event eight-week time bar and what are its consequences?

Under NEC4 ECC Clause 61.3, the contractor must notify the Project Manager of a compensation event within 8 weeks of becoming aware that the event has occurred. If the contractor fails to notify within 8 weeks, the event is treated as if it were not a compensation event — the contractor loses all entitlement to additional time and money for that event, even if it was genuinely the employer's risk. The PM must also act: if the PM instructs a change and does not notify a compensation event within 8 weeks of the instruction, and the contractor has not notified, the contractor retains the right to notify later (the time bar only applies to contractor notification of non-instructed events).

What is the JCT Schedule 2 quotation procedure and when should it be used?

The JCT SBC/Q 2016 Schedule 2 quotation procedure allows the employer to request a lump-sum quotation from the contractor for a proposed variation before the instruction is issued. The contractor has 21 days to submit a quotation covering: the additional cost; any adjustment to the contract sum for associated work; any extension of time required; and a revised programme. The QS has 7 days to assess the quotation; the client has 7 days to accept or reject. If accepted, the quotation is the agreed value and the instruction is issued. If rejected, the instruction may still be issued and valued under the standard JCT 5.6 hierarchy. The Schedule 2 procedure is preferable where time permits, as it fixes the value before work commences.

Section 6

Change Control Checklist

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Change Request Form completed for all potential changes before work commences

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Cost and programme impact assessed and client approval obtained before instruction issued

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Formal written instruction issued (Architect's Instruction / Engineer's Instruction)

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JCT Schedule 2 quotation procedure used where time permits

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Variation valued using correct hierarchy (contract rates → analogy → star rates → daywork)

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NEC4: compensation event notification checked against 8-week time bar (Clause 61.3)

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Variation register updated immediately with reference, description, status, and value

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FFC updated immediately on instruction (at assessed value) and on agreement (at agreed value)

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Progressive variation agreement meetings held with contractor's QS throughout construction

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All variations agreed or assessed by Practical Completion; disputed items formally identified

Section 7

CPD Learning Outcomes

Apply the RICS Change Control and Management seven-step process to capture, instruct, value, and record variations under JCT SBC/Q 2016, correctly applying the variation valuation hierarchy and the Schedule 2 quotation procedure.
Identify NEC4 compensation events from the Clause 60.1 list, apply the eight-week notification time bar, and advise the PM on the assessment obligations and consequences of missing contractual deadlines.
Maintain a variation register and update the Forecast Final Cost in real time, ensuring the client's cost position accurately reflects all instructed and anticipated changes throughout the construction phase.

Section 8