6.5.1.2 Procedures to implement changes

or modifications to the contract

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Every Contracting Authority is required on the one hand to have instituted change management procedures for covering the steps below, and on the other to have assigned the relevant competencies and responsibilities to individual persons, roles or committees:

Submission of request for change
Evaluation of the effects and impact of the change
Review and acceptance or rejection of the change
Update of contract documents
Implementation of the change

A common practice applied in change management is the review of the requests and decision making by different bodies with escalating limits of authority. This means that the small scale changes characterised also by a small effect on the key parameters of the scope to be executed, are reviewed by the role or body with the lowest authority compared to the others.

In accordance with the Regulation 115/2004 which applies for the Ministries, Departments and Services that come under these as well as for the Independent Offices and Independent Services of the Republic of Cyprus, the handling of changes or modifications to the contract is carried out by the Project Manager (or the Engineer in the case of public works), the Departmental Committee for Variations and Claims and the Central Committee for Variations and Claims depending on the limits of authority granted to each one of them and set forth in the Annex 7-15.

If the request for change comes from the Contractor, it must be submitted to the Contracting Authority at least 30 days (unless otherwise set forth in the contract) before the modification is intented to be put into effect, except in cases that are properly documented by the Contractor and accepted by the Contracting Authority. The Contractor's request is reviewed by the competent body depending on the value of the change, pursuant to the following method:

When the amount of the change or modification to the contract comes under the limits of authority of the Project Manager (or Engineer in case of public works) (Annex 7-15), the decision is made by the Project Manager (or the Engineer), who prepares a documented report in accordance with theAnnex 6-13 [ The template of the Report of Annex 6-1 is the Annex II of the KDP 115/2004 (Regulation 20). ]. The report is notified immediately to the administrative superior of the Project Manager (or the Engineer) and the competent Departmental Committee.
When the amount of the change or modification to the contract exceeds the limits of authority of the Project Manager (or the Engineer) but not those of the Departmental Committee (Annex 7-15), then the Project Manager (or the Engineer) prepares a documented report in accordance with the Annex 6-1 for the proposed change and sends it to the competent Departmental Committee for the decision making. The decision of the Departmental Committee is notified to the head of the Contracting Authority.
When the amount of change or modification to the contract exceeds the limits of authority of the Departmental Committees the issue is studied by the Departmental Committee and submitted along with the appropriate recommendations and proposals and the report of the Project Manager (or the Engineer) (through the Head of the Contracting Authority) to the Central Committee for the decision making.

In a case where the request comes from the Contracting Authority the Project Manager (or the Engineer) must notify the Contractor of the nature and form of the modification that the Contracting Authority intends to promote and requires him to submit a written proposal which will contain:

description of the service to be executed or measures to be taken and their implementation schedule if the request for change is accepted, and
the necessary modifications in the implementation plan or in any of the obligations of the Contractor based on the contract.

Following the receipt of the Contractor's proposal, the Project Manager (or the Engineer in the case of a public project) sees to grant the approval of the change by the competent bodies (as these were mentioned previously) always based on the value of the change.

Following the approval of the change or modification to the contract, the Project Manager (or the Engineer) must inform the Contractor in order to proceed with the implementation of the modification in accordance with the general conditions that had been set forth in the original contract. In the case of public works for example, the Engineer (Official representing the Office of the Chief Architect of the Department of Public Works and has the role of Project Manager in public works) once he receives approval for the requested modification in the nature, quality or quantity of the works through the legal procedures mentioned previously, he is entitled to give instructions to the Contractor, so that the latter executes any one of the following:

raise or reduce the quantity of any work included in the contract
omit a certain work included in the contract (but not when the work removed is executed by the Contracting Authority or another economic operator)
modify the type or quality or nature of any work
modify the levels, lines, position and dimensions of any part of the project
execute additional work of any kind that is necessary to complement the project
modify any chronological order in the construction of any part of the project.

It is pointed out that the modification of the Contract is set forth in writing in an Amendment which is drafted and governed by the same terms as those of the original contract. Also, as long as the approved changes affect the Plans for the execution of the contract scope (Project implementation plans), the Project Manager (or the Engineer) and the Project Manager on the part of the Contractor must update the relevant Plans (e.g., Activities Schedule, Resources Plan, Cost Plan etc.).

In a case where the modification to the contract involves the supply of complementary services (services deemed necessary to ensure the complete functionality of the product being produced and which became necessary due to unforeseen events), usually the Contracting Authority negotiates with the Contractor the cost of such services. In a case, again, where the modification involves the supply of the same type of services for additional time, the common practice is to use the same unit price to that of the original contract readjusted depending on what is set forth in the relevant article of the original Contract. In the case of public building and technical works any additional or minor expenditure that arises from the modifications in their execution contract must be estimated with the prices and unit prices of the Contract as long as in the opinion of the Engineer such prices are applicable. If the original Contract includes prices or unit prices that are not applicable in the modified work, then these prices may be used simply as the basis for the estimation of the additional or minor expenditure. If this approach proves to be unsuitable, the suitable prices and unit prices will be agreed upon following consultation of the Engineer with the Contracting Authority and the Contractor. In a case of disagreement, the Engineer, once he receives the concurrent opinion of the Contracting Authority, defines such prices and unit prices which in his opinion are appropriate and notifies the Contractor about it.


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