whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

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whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by TWG on Thu Apr 28, 2011 11:10 am

Sir:

May I ask again your help.

We have an existing consultancy contract with a private firm. The contract was awarded before the effectivity of the new IRR. Our agency is proposing to request the consulting firm to perform additional services which were not covered under the original scope of services but are related thereto. However, the additional services will entail additional cost and to be performed and completed within the orginal contract period.

By the way the variation order/change order does not exceed 10% of the contract amount.

Are we allowed to proceed with the implementation of the additional services through a varation order or other forms of change order? May I know what are the applicable laws or GPPB opinion.

Thank you for your usual support.




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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by Guest on Thu Apr 28, 2011 11:42 am

If the contract is already in its implementation stage and was procured outside the provisions of the RA 9184. I believe that the any changes on the contract should be governed by the law, rules and regulations at the time of the contract was made/procured.

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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by TWG on Thu Apr 28, 2011 11:59 pm


Sir,

I am sorry but it does not exactly anwer my question. As we are all aware, in infra contracts Variation Order is allowed under the IRR of RA 9184. My question is whether the same applies to consultancy contracts. Thanks.

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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by RDV @ GP3i on Sat Apr 30, 2011 8:14 am

TWG wrote:
Sir,

I am sorry but it does not exactly anwer my question. As we are all aware, in infra contracts Variation Order is allowed under the IRR of RA 9184. My question is whether the same applies to consultancy contracts. Thanks.

Item 2 of Annex F (Contract Implementation Guidelines for the Procurement of Consulting Services) of the IRR provides that "All Consultancy contracts shall be fixed price contracts."

In case there are additional consultancy works that need to be done which were not included in the original contract, you may consider Negotiated Procurement - Adjacent or Contiguous under Sec. 53.4 of the IRR, subject to the compliance of the conditions therein and to the recommendation of the BAC and approval by the HOPE.
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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by TWG on Mon May 02, 2011 12:24 pm

RDV, Sir

Thank you. You exactly answered my question. But may I request for some clarification. You mentioned about "fixed price contracts". Is it not that "fixed price contract" means the cost is not subject to claim for escalation?

As I can recall, in price escalation there is adjustment in cost but under the same scope of services while in Variation Order, there is an additional scope of work which is related to the original scope but which entails additional cost.

Please educate me, Sir.


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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by engrjhez® on Tue May 03, 2011 10:05 pm

TWG wrote:...You mentioned about "fixed price contracts". Is it not that "fixed price contract" means the cost is not subject to claim for escalation?

As I can recall, in price escalation there is adjustment in cost but under the same scope of services while in Variation Order, there is an additional scope of work which is related to the original scope but which entails additional cost.

Please educate me, Sir.


Please allow me to give my answer.

The term "fixed price contract" means that it is not subject to price escalation. Remember that the Revised Guidelines for Price Escalation applies only to goods and infrastructure projects - not on consulting services (Par.1.1). It also follows that since we use "fixed price contract" any additional scope of work necessary for the delivery of services under the contract shall be "at no additional cost to the government".

If there are necessary works outside the original scope of the contract, then that would be the time a Negotiated Procurement (Adjacent/Contiguous) may be applied. Smile
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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by TWG on Wed May 04, 2011 4:57 pm


engrjhez, sir:

thank you so much for your invaluable help.

TWG

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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by engrjhez® on Fri May 06, 2011 3:01 pm

TWG wrote:
engrjhez, sir:

thank you so much for your invaluable help.

TWG

You are always welcome. (BTW, Are you from Region 5?) Smile
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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by RDV @ GP3i on Sat May 07, 2011 8:22 am

TWG wrote:RDV, Sir

Thank you. You exactly answered my question. But may I request for some clarification. You mentioned about "fixed price contracts". Is it not that "fixed price contract" means the cost is not subject to claim for escalation?

As I can recall, in price escalation there is adjustment in cost but under the same scope of services while in Variation Order, there is an additional scope of work which is related to the original scope but which entails additional cost.

Please educate me, Sir.


I had been out for a whole week without the benefit of an internet hence i wasnt able to answer your question, TWG.

But thanks to engrjhez, he has able to provide you with the right answer you were looking for. God Bless.
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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by engrjhez® on Sat May 07, 2011 9:23 am

RDV @ GP3i wrote:
I had been out for a whole week without the benefit of an internet hence i wasnt able to answer your question, TWG.

But thanks to engrjhez, he has able to provide you with the right answer you were looking for. God Bless.

No problem. Always welcome.

I just noticed that under Annex "F", the GPPB shall provide "manuals" that shall be part of the guidelines (rules and regulations) for implementation of consulting services. Are they still working this out? Smile
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Re: whether Variation Order/Change Order/Extra Work Order applies to consultancy service contract

Post by RDV @ GP3i on Sat May 07, 2011 11:12 am

engrjhez® wrote:
RDV @ GP3i wrote:
I had been out for a whole week without the benefit of an internet hence i wasnt able to answer your question, TWG.

But thanks to engrjhez, he has able to provide you with the right answer you were looking for. God Bless.

No problem. Always welcome.

I just noticed that under Annex "F", the GPPB shall provide "manuals" that shall be part of the guidelines (rules and regulations) for implementation of consulting services. Are they still working this out? Smile

That provision in Annex F was already in the old IRR-A. I think the guidelines in the old GPM would have served the purpose already, subject to further updating by the GPPB of the GPM because of the issuance of the revised IRR. However, I think there is not much to update as far as consulting services is concerned because there are only minimal changes in the IRR on consulting services.
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