Dispute and Cost Control in the Provision for Variations - a Comparative Analysis of Nec3 & Psscoc

1926 Words Jun 25th, 2010 8 Pages
Dispute and Cost Control in the provision for Variations - a Comparative Analysis of NEC3 & PSSCOC

A. Variations (cost control)
B. Dispute Resolution

A. Cost Control in Variations

Generally, cost control in the provision of Variations under most of the building contracts are stated in different steps. Hence, the steps can be generally divided into 3 stages which are variation notification, quotation submission and valuation based on rate, quantity or daywork. The comparison on the Variations was done under NEC and PSSCOC.

Clause 60 of NEC, defines the variations in Compensation Events base on the PM instruction on the changing of work information which is unreasonable to him.

Clause 19.1 of PSSCOC, defines the variations as “any
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Lts v A S Watson Group (HK) Ltd 1

B. Dispute Settlement

Dispute always happen when several parties are not able to agree on a common ground. Thus, there are several ways in resolving the dispute such as negotiation, mediation, arbitration or adjudication. The comparison on the procedure of dispute settlement was done under NEC and PSSCOC.

By subclause W1 & W2 of NEC, the dispute resolution procedures can be raised under 2 options:
W1- less time conscious
W2- more time conscious (time counts exclude Christmas, Good Friday and Bank Holidays)

Under clause 35.1 of PSSCOC, dispute between Employer/ SO/ SO representative and Contractor can be happen during work execution, after completion and before or after the termination of contract.

Figure 3a- Dispute Resolution Procedures in NEC- Option W1

Figure 3b- Dispute Resolution Procedures in NEC- Option W2

Figure 4- Dispute Resolution Procedures in PSSCOC


PSSOC seems to cite the employer as we interpret from the variations clauses compare with NEC which likely to be on the fair side. The methods of valuation in PSSCOC are more comprehensive compare with NEC which is simple and straight forward. The valuation of compensation event by the PM in NEC seems to be fair to all the parties and induces lesser time. Generally, the procedures in resolving the dispute in NEC are likely to be more efficient and cost saving than PSSCOC. On the other hand, there is a special feature in
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