NZS 3910 §14 Variation Procedure Explained — NZ contract guide (2026)

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2 hours ago
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§14 of NZS 3910:2023 is the contractual machinery for changes after award. Misread it and a $20k variation lands as a $60k claim plus an extension of time argument that drifts another six weeks. Read it cleanly and the same change closes on a written determination in 10 working days.

By Steve Parker · Trueworks · NZ construction estimation · 6 min

What you'll learn in this post

What §14 actually covers
§14.2 — what counts as a variation
§14.3 — how a variation gets instructed

Quick answer: §14 of NZS 3910:2023 covers four things separately — what counts as a variation (§14.2), how it's instructed (§14.3), how it's valued (§14.4), and the time effect (§10.3). The §14.4 valuation hierarchy is binding: schedule rates first, then analogous rates, then reasonable cost plus margin, then daywork. Most NZ residential disputes arise from conflating these four steps. Played correctly, a typical residential variation closes in 10-14 working days with a written determination.

NZS 3910:2023 is the dominant general conditions of contract on NZ residential and light-commercial construction work — used in some form on a large share of jobs run under a formal head contract. §14 is the part of the contract that handles changes after award. Misread it and a $20k variation lands as a $60k claim plus an extension-of-time argument that drifts the programme another six weeks. Read it cleanly and the same change closes on a determination in 10 working days, with both parties knowing where the file sits.

This post is the working-builder / working-QS read of §14 — not a legal commentary, but a practical anatomy of how variations move through the contract.

What §14 actually covers

§14 of NZS 3910:2023 is titled "Variations" and sets out four distinct things:

What counts as a variation (§14.1 / §14.2)
How a variation gets instructed (§14.3)
How a variation gets valued (§14.4)
The time effect on the programme — covered partly here and partly under §10.3

Each of these has separate procedure. Conflating them is the most common mistake we see on disputed variations.

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§14.2 — what counts as a variation

| §14.2 sub-clause | What it covers | Typical NZ residential trigger | |---|---|---| | §14.2.1.1.a | Instructed change | Architect issues a written instruction to change the cladding spec | | §14.2.1.1.b | Change required by law or authority | Council requires a redesign during consent inspection | | §14.2.1.1.c | Change in quantities beyond what was foreseeable | Geotech reveals more rock than the geo-report indicated | | §14.2.1.1.d | Change in conditions (latent conditions) | Demolition uncovers asbestos in the original soffit |

Things that often look like variations but aren't, under §14:

Contractor-side errors in pricing
Better-quality work the contractor decided to provide unprompted
Acceleration the contractor chose without an instruction
Co-ordination failures within the contractor's own scope

The Engineer to the Contract's first job on receiving a variation request is to determine whether the change actually falls under §14.2. About 15-20% of the variations we see on residential builds don't — they're scope items the contractor should have priced and didn't. Closing those out early is part of the CA discipline.

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§14.3 — how a variation gets instructed

§14.3 sets the sequence: the Engineer issues a variation instruction in writing; the contractor either acknowledges and proceeds, or notifies that the instruction is impractical, unsafe, or outside scope; if the contractor proceeds without acknowledgement of cost / time effect, both parties are at risk.

In practice on residential work, most variations don't follow this clean sequence — the conversation happens on site, the work happens, and the variation claim follows. Whether that's defensible depends on the documents and the paper trail. The CA discipline: every variation instruction in writing before work proceeds, even retrospectively if a verbal instruction was given.

§14.4 — how a variation gets valued (the binding hierarchy)

§14.4 sets a hierarchy of valuation methods. The order matters and is binding:

| Order | Method | When it applies | |---|---|---| | 1 | Rates from the contract schedule | The variation work is similar to work in the schedule | | 2 | Rates analogous to the schedule | The work isn't in the schedule but is similar | | 3 | A reasonable cost plus a margin | No schedule rates applicable — build up from first principles | | 4 | Daywork | Last resort, daywork rates apply |

Two practical points:

Most residential contracts don't have a meaningful schedule of rates. They have a lump-sum head contract with no breakdown. Which throws every variation into option 3 — reasonable cost plus margin — and that's where the negotiation happens.
The margin is contestable. "Plus a reasonable margin" is not a defined number. Industry-standard is 10-15% for builder's overhead and profit, but this is a negotiation and the principal has standing to challenge unreasonable margin claims.

The Engineer's job is to pick the right method, build the valuation transparently, and write the determination. The contractor and principal can then accept or dispute.

§10.3 — the time effect

A variation's cost is one thing. Its time effect is a separate determination. §10.3 governs extensions of time: the contractor notifies under §10.4 (within 20 working days), the Engineer determines under §10.3, and the extension granted is for the delay caused by the variation, not delays caused by other factors.

The mistake to avoid: bundling time and money. Separate determinations, separate clauses, separate timeframes. Bundling produces the disputes that go to adjudication.

A worked example

A residential build under NZS 3910:2023, $1.8M head contract. At month 4, demolition uncovers asbestos in the original soffit.

Played correctly:

§14.2.1.1.d (changed conditions) identified
Engineer issues written variation instruction within 5 working days
Valuation built under §14.4 from licensed remover's quoted price plus margin
§10.3 extension of time determined separately at 5 working days on the critical path

Written determination signed

Whole thing closes in 10-14 working days.

The bad version: the contractor removes the asbestos without an instruction, submits a $35k claim three weeks later. The Engineer rejects parts of the claim because the unilateral action wasn't authorised. Six months later the file is still open and both parties have legal fees.

Four disciplines that make §14 work

Every variation in writing, before work proceeds. Even on a small change — the two-line email cost is far smaller than the disputed-claim cost.
Variation cost and time effect kept separate. Two determinations, two paper trails. Don't bundle.
Valuation method named. If you're claiming under §14.4 first principles, your build-up should show that schedule rates and analogous rates don't apply.
§10.3 notification within timeframes. The 20-working-day notification clock under §10.4 is unforgiving. Miss it and the time-effect claim is contestable.

For the Engineer specifically: write each determination as if the next CA were taking the file. State the §14.2 sub-clause, the documents reviewed, the valuation method. Close out within 10 working days — a determination open for six months becomes a dispute.

A note on the 2023 update: NZS 3910:2023 replaced the 2013 edition with material changes to dispute resolution and the Engineer's role. The variation procedure under §14 is broadly continuous between the two editions but the procedural detail around timeframes has been tightened. Check which edition your contract names.

What to check on every variation

Five items, every time:

The §14.2.1.1 sub-clause the variation falls under
The written instruction (or the retrospective written confirmation of a verbal instruction)
The §14.4 valuation method, named
The §10.3 time effect, determined separately

The Engineer's written determination, signed and dated

If those five items are in the file, the variation is defensible. If they're not, the variation is the start of a dispute waiting to land.

FAQ — NZS 3910 §14 variation procedure

Q1: What's the difference between NZS 3910:2013 and NZS 3910:2023 on variations? The 2023 edition tightened the procedural timeframes for variation determinations and clarified the Engineer's impartiality obligation under §6.1.1. The §14 valuation hierarchy is broadly continuous between editions, but the dispute-resolution clauses around the Engineer's determinations changed materially.

Q2: Can a contractor refuse to carry out a §14 variation instruction? Under §14.3, the contractor may notify the Engineer that an instruction is impractical, unsafe, or outside scope. The contractor cannot simply refuse — but a written notification triggers the Engineer's obligation to revisit the instruction.

Q3: What's a "reasonable margin" under §14.4 on a residential variation? Industry-standard for builder's overhead and profit on a §14.4 first-principles valuation is 10-15%. The margin is contestable — neither end of the range is automatic — and the Engineer's determination is the binding answer subject to dispute.

Q4: How long does the contractor have to notify a §10.3 extension of time claim? §10.4 sets a 20-working-day notification window from the event giving rise to the delay. Miss it and the EOT claim becomes contestable. The 20-day clock is one of the most-missed deadlines on residential work.

Q5: Does the Engineer's variation determination bind both parties immediately? The determination is binding subject to the §13 dispute-resolution process. Either party may dispute, but until disputed and overturned through the §13 process, the determination stands. Most residential determinations settle without dispute.

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About Trueworks

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