Pricing channels for works outside the contract scope and unforeseen works: recognising and pricing additional works, when dayworks apply, and the rules for using provisional sums

Topic Positioning

This card covers the pricing channels for works outside the agreed scope and unforeseen works: recognising and pricing additional works, when dayworks apply, and the rules for using provisional sums. For settling and reviewing "actually executed off-contract items" and "unforeseen items" in EPC / design-build and construction contracts.

Core Conclusions

1. Pricing additional works (GB/T 50500-2024 clause 8.10.1, original): "Where the contractor, at the employer's request, completes additional works outside the agreed scope, the parties may compute the price per the national and sector quantity take-off standards agreed in the contract - their item-setting requirements, measurement rules and supplementary measurement rules, the contract rates and the tendered rate level - or renegotiate the measurement and pricing rules of the additional works, computing the price and signing an additional-works contract or supplementary agreement. The contractor may compile and price a BOQ for the additional works per the contract or relevant provisions. The preliminaries in that BOQ shall include the cost of preliminaries used beyond their planned period or newly provided."

2. Recognising additional works (T/ZBD 100.5-2023 clause 3.1.10): where during execution the contractor, on the employer's instruction, performs works outside the agreed scope, the settlement review treats them as additional works and adjusts the contract price. Where the parties jointly recognise the cost, adjust per what they recognised; where not, then absent contract agreement otherwise, any of the following recognises an addition: (1) contract scope covering the whole project or a single work - a single work added; (2) scope covering a single work - ancillary works outside the scope or specialist works that could be tendered separately added; (3) scope covering a specialist subcontract - other specialist works outside the scope added.

3. Pricing principle: absent contract agreement otherwise, where a supplementary agreement fixing the pricing principle and method exists, it governs; where no supplementary agreement exists and no evidence shows a clear pricing principle and method, the original contract's pricing principles do not necessarily apply.

4. Pricing methods (absent contract agreement otherwise): (1) original contract priced on sector or local budget quotas - the corresponding quotas may be referenced; where the contractor claims the rates of the companion building-works on-cost quota, analyse the claimed rates against the contract's agreed rates, adopt reasonable rates and state so in the review report; (2) original contract on BOQ pricing - analyse on the all-in unit rates of the applicable divisional items and compute the preliminaries caused by the addition on the factual evidence; (3) claiming adjustment of all-in rates - the claimant must evidence labour, material and plant (or hire) unit prices, analyse price differences between the addition's execution period and contract signing, and adjust the factor prices; (4) claiming adjustment of the rate build-up factors or levels - weigh the contract quantities against the addition's scale and analyse the necessity and reasonableness of the adjustment; (5) claiming the tendered all-in rates ran below then-market reasonable prices through competitive tendering such that continuing the addition is plainly unreasonable or loss-making - require the contractor's reasons and evidence and reasonably consider a rate-adjustment factor as the case may be; (6) original contract lump-sum priced without tendered detail - require the contractor to evidence the labour, material, plant, overheads and profit make-up and set the price after analysing its reasonableness.

5. Dayworks applicable (clause 7.5.2) - absent contract agreement otherwise, the following works and minor jobs may be measured and priced as dayworks: (1) added or substituted works not measurable from the drawings, variations or the contract's measurement rules; (2) short-duration, minor, bounded-scope, small-quantity items added at the employer's request; (3) abnormal operations from extreme working conditions; (4) repairs of damage to other works caused by emergency works; (5) opening up concealed works at the employer's request where the works prove compliant on testing; (6) the cost of repairing affected surrounding works after other contractors finish; (7) the cost of materials that must be replaced because the employer suspended the works and delayed them; (8) off-scope clearing and clean-up specially required by the employer; (9) off-scope test runs required by the employer; (10) minor repairs and restoration of damaged works not caused by the contractor (large-scale restoration is measured and priced as a variation).

6. Provisional sums (clause 8.3.2): where a provisional sum within the contract total serves works not fully foreseeable or detailed, the parties compute the divisional BOQ quantities from the mutually confirmed drawings and price the adjustment at the contract rates; where completing those works changes the preliminaries, adjust per section 8.9; the contract price adjusts for the difference between the determined adjusted price and the provisional sum, and the total so adjusted includes the VAT adjustment.

Applicability Boundaries

• An additional work presupposes "outside the agreed scope" and executed on the employer's instruction or request; design development within scope, BOQ omissions and quantity deviations are another category and are not treated as additions.
• The detailed rules for setting all-in rates of additions (contract rates first, negotiated build-up as fallback, factor price differences and correction of low or high rates) are on related cards; this card focuses on "recognition + review pricing methods + the dayworks / provisional-sum channels".
• Clause 8.10.1 is from GB/T 50500-2024; T/ZBD 100.5-2023 is an association standard applying mainly in settlement review; in conflict, the contract and higher-ranking standards prevail.
• Dayworks and provisional sums apply where the contract or BOQ already provides for them; using dayworks also follows the contract's agreed procedure.
• Whether an addition exists presupposes a defined contract scope - ill-defined scope is a dispute hotspot requiring proof from the contract documents and facts.

Further Reading

• GB/T 50500-2024 clauses 8.10.1, 7.5.2, 8.3.2
• T/ZBD 100.5-2023 Guidance for Settlement Review Practice, clause 3.1.10 (additional works), clause 3.1.5 (lump-sum review)