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Pricing & Commercial

Pricing variations and scope changes.

Variations are inevitable on most construction projects. Knowing how to value additions, omissions, and provisional sum adjustments protects your margin and keeps the final account process running smoothly.

Authored by Alexandr Vreme & Maksym Vasylkov
Published July 2026 — Next review July 2027

What is a variation?

A variation is a change to the original scope of works that affects the cost, time, or quality of the project. Variations can be instructed by the contract administrator, architect, or employer, and may include additions, omissions, substitutions, or changes to working methods.

Properly documenting and pricing variations is essential to maintaining commercial control throughout the project lifecycle.

Valuation methods

Standard forms of contract (such as JCT) provide three main valuation methods, applied in order of priority:

• (a) Rates in the contract schedule: where the varied work is of similar character and conditions to items priced in the original contract bills or schedule of rates
• (b) Daywork rates: where the work cannot be measured practically or valued by contract rates. Valued at agreed daywork rates plus agreed percentage additions for overheads and profit
• (c) Fair valuation: where no applicable rate exists in the contract and daywork is not appropriate. A fair and reasonable rate is agreed based on the actual cost plus a reasonable margin

Additions

When additional work is instructed, it should be valued using the contract rates wherever the work is comparable. If the contract does not contain applicable rates, a quotation should be agreed before the work begins. Daywork rates provide a fallback for small or unmeasured items.

Always confirm in writing that a variation instruction has been received before proceeding with additional work.

Omissions

Omitted work is deducted at the value stated in the contract. A key principle is that overhead and profit cannot be added to omitted work — you deduct the value that would have been paid had the work been carried out. This prevents the contractor from benefiting commercially from a scope reduction.

Provisional sum adjustments

A provisional sum is an allowance included in the contract for work that cannot be fully defined at tender stage. When the work is instructed, the actual cost is added to the contract sum and the unused balance of the provisional sum is deducted. The client receives the benefit of any underspend.

Miniature example

A variation instruction on a landscaping package:

• Addition: 40 m² of paving at schedule rate £120/m² = £4,800
• Omission: original concrete slab at £70/m² = -£2,800
• Net variation: £2,000 additional

The net addition of £2,000 is added to the contract sum in the next interim valuation.

Questions to ask

• Is this a genuine change to the scope or a correction of an error in the original documents?
• Does the variation entitle me to a time extension?
• Have I received a written instruction before proceeding?
• Which valuation method applies — contract rates, daywork, or fair valuation?