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One Notice Will Do, for “Extension of Time Variations” NZS3910

Updated: Sep 30

Have you been awarded an extension of time for a variation but denied the money for the variation and its time related costs for lack of notice of variation?

Why put in separate notices for extensions of time for the net effect of a variation as well as put in a separate notice of variation involving an extension of time, when in most cases the events giving rise to each entitlement are one in the same?

Focus on Extension of Time Notices First

There are more requirements for Notice of Extension of Time, than a Notice of Variation. The Notice of Variation requirements are a subset of the Notice of Extension of Time requirements. You can cover both by focusing on the Notice of Extensions of Time requirements.

The definitions of EoT for 10.3.2 (a) to (e) and (g) ALL share the definition of 10.3.1 (f) any circumstances not reasonably foreseeable by an experienced contractor at the time of tendering and, (with the exception of 10.3.1 (d)), not due to the fault of the contractor.

The Engineer can only award an extension of time if the claim at least, or also, meets the general criteria of 10.3.1 (f). circumstances not reasonably foreseeable.

Variations for circumstances not reasonably foreseeable

There are 7 triggers within 4 clauses of the contract for circumstances relating to variations arising from ‘2.7 Documents prepared by the Engineer or principal’, ‘5.11 Compliance with laws’, and ‘9.5 Unforeseen Physical Conditions’, that also require the “not reasonably foreseeable” test to be applied before they are determined to be a variation.”

Secondly if the notice passes the “not reasonably foreseeable” test, the circumstances must still Cause additional cost to meet the threshold for variation status.

Variations for circumstances that Cause a delay to the Completion of the Contract Works

There are 13 triggers within 11 clauses of the contract where the circumstance “Causes a delay to the Completion of the Contract Works” shall be treated as a variation. Including 3 triggers that also require the “not reasonably foreseeable” test, discussed above.

ALL of the contract clauses, that describe circumstances that “Cause a delay to the Completion of the Contract Works” are circumstances that shall be treated as a variation.

One Notice Will Do, for “Extension of Time Variations”

There are two types of extension of time claims

[1] Extension of Time Variations including Principal default not currently prescribed as a variation, 10.3.1 (a) & (g).

[2] Extension of Time that are Not variations, because they obviously fit one of these criteria

2.1 – Act of God, weather, Flood, volcanic or seismic events, 10.3.1 (b) & (e).

2.2 – Act of unionised workforce 10.3.1 (c).

2.3 – Acts of loss or damage, (typically insurance events), 10.3.1 (d).

2.4 – Acts of Unicorns, any non-VO matter not captured above, 10.3.1 (f).

The majority of Extensions of time claims are for variations. The remainder will show fingerprints from the hand of God, trade unions, insurance companies or unicorns, yes unicorns have hands.

The Engineer shall grant an EoT if the Contractor is fairly entitled to and EoT by reason of VARIATION, right at the TOP of the list!

The Engineer shall investigate the claim 10.3.4. Actively inquire, dust for prints, and determine who’s hand is found at the scene.

The engineer can only skip the test of variation, if the circumstances obviously refer to Weather, Strike, Loss / damage or flood event, etc. If the Engineer can’t blame the four horsemen of the apocalypse, all that is left is Variations and Unicorns.

Order of Process to Determine an EoT and its reason of

[1] determine a delay has occurred that was not reasonably foreseeable 10.3.1 (f)

[2] eliminate all or affirm one of the four horsemen 10.3.1 (b) (c) (d) or (e)

[3] eliminate or affirm the fault of the Contractor 10.3.1 (f) (3rd process because 10.3.1 (d) excuses the Contractor at step [2])

[4] eliminate all or affirm any possible variation 10.3.1 (a) and (g), leaving only

[5] Unicorns, delays without compensation, not described above.

If the process ‘Passes Go’ at [1], it must stop somewhere down the order.

Notice of Extension of Time implies a Notice of Variation

The Engineer can deny an extension of time claim because;

[1] no delay has occurred.

[2] a delay has occurred but it was reasonably foreseeable. or

[3] The Contractor is at fault 10.3.1 (f). or

[4] The Engineer exercises their discretion not to be bound to grant an EoT where one is obviously otherwise due, for reason of lack of notice 10.3.2 resulting in avoidable material negative impacts making it unfair to the Principal, if the Engineer was to grant an Extension of Time.

In these circumstances a separate variation notice is required, if the same circumstances give rise to one.

In all other circumstances, the Engineer, in granting an EoT, must rule out Variations entirely before declaring a Unicorn Act 10.3.1 (f) has occurred. If the Engineer disallows a Variation as the basis of awarding an EoT, they must give their reasons (9.2.4).

‘Notice of claim for extension of time’ is also an implied ‘notice of variation’, to the Engineer, because the process to confirm or disallow a Variation (9.2.4) has to form part of the process in 10.3.4 to determine a fair entitlement that decides between 10.3.1 (a) or 10.3.1 (f), as the basis of an EoT.

A Variation itself cannot be denied, if an extension of time is granted for reason of net effect of Variation. And an extension of time cannot be denied, due to lack of separate notice of variation.

One Notice will do, Just Add one Word

But all that is the hard way, when you do not issue two notices. Save it for a bad day. The Easy way is to just add the word ‘Variation’ to your extension of time notice, and comply with all the extension of time notice requirements.

Notice text examples;

‘Notice of Extension of Time Variation’. or

‘Notice of Extension of Time & Variation’.

It is as simple as that. By adding the V word, the Engineer is in no doubt you are claiming an extension of time by reason of Variation, and their attention is drawn to both 9.2.4 and 10.3.2 in responding to the claim notice.

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“Celebrating 50 years of New Zealand Building Economist 1972 to 2021”

By Matthew Ensoll


Editor New Zealand Building Economist.

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