2.8.6 Negotiating on variations to the Contract

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Contract variations are negotiated between the contracting authority and the supplier and may or may not arise as a result of the contract monitoring process. Variations relating to a decrease in the scope or price of a contract can occur for a number of different reasons, such as:

the quantity or quality of goods or services or works being required by the contracting authority may change;
the timescales for delivery of goods or services or works may be altered due to, for example, market demand;
changes to the nature of the service being provided, (especially in longer term contracts) may occur such as when there is a change in market demand or new technologies or new and unforeseen legislation;
Unforeseen events (e.g. industrial action of key personnel of the supplier).

Regardless of how they are identified, there should be clear “change control” procedure set out in the contract on how variations will be dealt with. 

Once the terms of the variation has been agreed you should instruct and prepare a deed of variation. Once approved, contract variations should be monitored and controlled in the same way as the original contract. It is important to note that the competent bodies (Project Manager, Departmental or Central Committee for handling Variations and Claims) have the power and duty to decide on any proposed modifications or variations to a contract and/or claims raised by a contractor and/or the interested service (Regulation 115/2004).

When there is a need to increase the scope and price of a contract, please refer to the National Law 12 (article 33 b, d) In these cases the Contracting Authority needs to award the supplementary or new similar services, works and goods to the existing contractor using the negotiated procedure.

Any variation should not modify substantialy the contract scope, distorting in this way the initial competition and infringing the principle of non discrimination. In addition, you should never agree a variation verbally or by letter as this may invalidate the whole agreement or weaken your right of enforcement. For delaing with any varition the defined procedure should be followed.

© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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