Introduction

In the realm of administrative and commercial contracting, project owners or management have the right to modify the scope of work executed by contractors based on the original agreement. This often includes expanding the contractor's obligations within certain guidelines. It's not uncommon for the need for additional, complementary work to arise—whether these tasks are specified in the contract or entirely new. Given the significance and potential complications arising from claims for additional work, this article delves into compensation for such work in contracting agreements and the legal foundation for compensation, addressing the following aspects:

Understanding Additional Work

Additional work refers to tasks issued by the project owner to the contractor that extend beyond the scope agreed upon in the construction contract. This includes adding one or more tasks not initially agreed upon to fulfill all required and newly introduced work according to operational needs, quality standards, and engineering specifications, provided the added work does not exceed 10% to 20% of the original contract value.

Types of Additional Work

1.    Tasks not listed in the contract, termed as "new work items."

2.    Additional quantities for existing contract items, referred to as "quantity variances."

3.    Tasks not specified for certain buildings in the contract but present in others, known as "analogous items."

Such modifications are formally documented as "change orders" in the contract for new tasks, quantity variances, or analogous items, requiring the owner's approval and inclusion in the contract documents for contractor compensation.

Guidelines for Assigning Additional Work

Article 114 of the Executive Regulations of the Government Tenders and Procurement Law sets forth guidelines for project owners when assigning additional tasks or making changes, including:

1.    Limiting modifications to a regulatory percentage, not exceeding 10% of the total contract value.

2.    Issuing modifications from an authorized person or representative through written directives.

3.    Ensuring additional tasks are within the contract's scope and serve the facility's interest without compromising terms, specifications, the work's scope, the contract's nature, or its financial balance.

4.    Verifying the availability of funds to cover additional work costs before commissioning the contractor.

5.    Issuing all orders related to changes in contractor obligations and additional work durations from an authorized person.

When Additional Work is Uncommissioned

Contractors should not execute additional tasks or services beyond the contract's scope without specific authorization from the project owner, risking non-compensation for unauthorized work per Article 115 of the Executive Regulations. However, contractors may be entitled to compensation for additional work essential for contract execution as per natural requirements, without altering plans (based on a previous Board of Grievances ruling).

Authorizing Additional Work

It's crucial to differentiate between formally authorized additional contractual obligations and work undertaken by the contractor without prior authorization, which necessitates a thorough evaluation of the contractor's entitlement to claims based on the contract and the nature of the work.

Contractors can use correspondence, receipt records, approval requests, change orders, invoices, purchase orders, and other documents to substantiate their claims for additional work.

This comprehensive overview underlines the importance of clear contractual provisions and proper authorization for additional work in administrative and commercial contracting, ensuring both parties' interests are safeguarded and disputes are minimized.