£512,000 of additional value recovered through correct contractual valuation
Civil Engineering Contractor | Onshore Wind Farm Project
KEY DETAILS
CLIENT TYPE
Civil engineering contractor
SECTOR
Onshore wind farm infrastructure
PROJECT SCOPE
Balance of plant works
CONTRACT SUM
£70 million
FORM OF CONTRACT
FIDIC yellow book, 1st edition 1999
COMMERCIAL ISSUE
Valuation of instructed additional works
ADDITIONAL VALUE RECOVERED
PRIMARY SERVICE AREAS
£512,000
Contractual risk & entitlement strategy; Margin protection & revenue recovery
Introduction
A civil engineering contractor delivering Balance of Plant works for a major onshore wind farm was instructed by the developer to value additional works using a Cost + Fee approach.
Although this appeared reasonable on the surface, it would have significantly reduced the contractor’s recovery and weakened the overall commercial outcome.
Roxburgh Murray carried out a detailed review of the contract and identified that the works should instead be valued using the agreed Schedule of Rates.
By applying the correct contractual mechanism, preparing the contractor’s entitlement and negotiating directly with the developer, Roxburgh Murray recovered an additional £512,000 of commercial value that could otherwise have been lost.
The situation
The contractor was delivering Balance of Plant works on a major onshore wind farm project.
During delivery, the developer instructed additional works and asked the contractor to prepare its proposal using a Cost + Fee approach.
This valuation method appeared straightforward, but it did not reflect the contractor’s full entitlement under the contract.
The contractor faced an important commercial decision. It could follow the developer’s proposed approach and accept a more limited recovery, or it could test the valuation mechanism against the contract and establish whether a stronger entitlement existed.
Roxburgh Murray was brought in to review the position and determine the correct contractual route.
The commercial risk
Had the contractor accepted the Cost + Fee approach without further analysis, the additional works would have been valued through a mechanism that materially reduced the potential recovery.
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Under-recovering for the additional works
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Losing significant commercial value
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Weakening its position in future negotiations
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Accepting a valuation method that did not reflect the contract
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Allowing value already created through project delivery to go unrecovered
The issue was therefore not simply whether the contractor could recover its basic costs.
The key commercial question was whether the additional works were being valued using the correct mechanism and whether the contractor was receiving the full value it was contractually entitled to.
Roxburgh Murray’s review
Roxburgh Murray carried out a detailed review of the FIDIC Yellow Book contract and the proposed valuation approach.
The review established that the instructed works should not be valued using the developer’s suggested Cost + Fee method.
Instead, the contract entitled the contractor to value the additional works using the agreed Schedule of Rates.
This distinction materially changed the contractor’s commercial position.
The Schedule of Rates produced a stronger and more appropriate valuation than the proposed Cost + Fee approach, giving the contractor a clear contractual basis for recovering additional value.
The Roxburgh Murray approach
Roxburgh Murray helped the contractor move from a potentially restricted recovery position to a stronger, contract-led valuation.
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Reviewing the relevant FIDIC contract provisions
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Assessing the developer’s proposed Cost + Fee approach
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Identifying the correct contractual valuation mechanism
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Establishing entitlement to use the agreed Schedule of Rates
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Preparing and substantiating the contractor’s valuation
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Setting out the contractual basis for the recovery
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Negotiating directly with the developer
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Supporting the contractor through to agreement
The value did not come simply from producing a higher figure.
It came from demonstrating why that figure was contractually justified and giving the contractor a robust basis for negotiation.
The outcome
The valuation was successfully agreed using the contractual Schedule of Rates.
This resulted in an additional £512,000 of value recovered for the contractor compared with the proposed Cost + Fee approach.
The outcome protected the contractor from significant under-recovery and ensured that the instructed works were valued through the mechanism the contract provided.
What this shows
This case demonstrates why contractors should not automatically accept the valuation method proposed by another party.
A recovery route may appear reasonable, but that does not mean it reflects the strongest contractual entitlement.
The difference between Cost + Fee and an agreed contractual rate mechanism can materially affect the value recovered from additional works.
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Challenge the proposed valuation approach
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Identify the correct contractual mechanism
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Substantiate the stronger entitlement
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Negotiate from a clearer commercial position
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Recover value that could otherwise have been missed
The director-level lesson is clear:
The method used to value additional work can be just as important as the work itself. Before accepting a proposed approach, the contract should be reviewed to establish the full value available.
Why it matters to construction leaders
On complex construction projects, commercial value is often lost through decisions that initially appear procedural.
A valuation method, contract clause or proposed recovery route can have a substantial impact on the project outcome.
For directors and commercial leaders, this case highlights the importance of asking:
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Is the proposed valuation method correct?
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Does the contract provide a stronger route?
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Are agreed rates available?
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Is the full value of the additional work being captured?
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Has the entitlement been properly substantiated?
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Is the business negotiating from the strongest available position?
Roxburgh Murray combines Quantity Surveying expertise with detailed contractual analysis to help clients answer those questions before value is lost.
Related services
Understand what the contract allows, where risk sits and what action is required to protect entitlement.
Get focused senior-level support when a project, claim, delay issue or final account needs immediate control.
Prepare and negotiate from a stronger commercial position while protecting important project relationships where possible.
Are additional works being valued through the correct contractual mechanism?
A proposed valuation route may not reflect the full value your business is entitled to recover. Roxburgh Murray can review the contract, assess the proposed valuation method and help establish the strongest commercial position available.