Case Study: Managing Discrepancies in Lump Sum Contracts under NZS 3910 – A Real-World Example
Date: 03 September 2025
By Fouad El Chikhani| Construction Contracts Specialist & Expert Witness
In the world of construction contracts, even small discrepancies can have significant ripple effects. This case study explores how a mismatch in structural steel quantities under a lump sum contract triggered a chain of events—impacting programme, cost, and coordination—and how NZS 3910 Subclause 2.2.5 provided the contractual framework to manage it.
NZS 3910 outlines a broad range of events under specific provisions that may be treated as Variations. If any of these events cause delays or incur additional costs that were not reasonably foreseeable by the contractor, they may be claimed as a Variation. In such cases, the contractor is entitled to an extension of time under clause 10.3.1(a) and compensation for time-related costs under clause 9.3.11.
Project Context
A Contractor was engaged to deliver a multi-storey commercial building under a lump sum contract. The Schedule of Prices included a line item for 120 tonnes of structural steel, based on preliminary design drawings.
However, once construction commenced, the detailed structural drawings revealed a requirement for 140 tonnes—a 20-tonne discrepancy not caused by the Contractor.
Contractual Implications – Subclause 2.2.5
Under NZS 3910:2013 Subclause 2.2.5, discrepancies between the Schedule of Prices and the Drawings or Specifications—where not caused by the Contractor—entitle the Contractor to:
- A Variation for the additional work,
- An Extension of Time (EOT), and
- Time-related costs under Clause 9.3.11.
Revised Sequencing Effects
The increased steel quantity led to a revised construction sequence:
- Steel delivery expanded from 2 to 3 stages
- Steel erection extended from 6 to 9 weeks
- Downstream activities (concrete pour, façade installation, MEP rough-ins) were delayed by 3 weeks
- Craneage, labour, and supervision costs increased
- Subcontractors had to re-mobilise, adding further cost and complexity
Gantt Chart: Before vs After
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Cost Impact Summary
| Category | Before (NZD) | After (NZD) | Difference |
|---|---|---|---|
| Craneage | $15,000 | $22,000 | +$7,000 |
| Supervision | $18,000 | $27,000 | +$9,000 |
| Labour Inefficiencies | $0 | $8,000 | +$8,000 |
| Re-mobilisation | $0 | $5,000 | +$5,000 |
| Total | $33,000 | $62,000 | +$29,000 |
Lessons Learned
- Early design coordination is critical in lump sum contracts
- Subclause 2.2.5 provides a clear mechanism for addressing discrepancies
- Programme impacts must be assessed holistically—not just in terms of time, but also cost and coordination
- Documentation and communication with the Engineer and Principal are key to securing entitlements
If you're navigating similar challenges in your projects, feel free to connect or reach out. This case highlights the importance of proactive contract administration and the value of understanding your entitlements under NZS 3910.