Five headings
| Heading | Content | Pitfall to avoid |
|---|---|---|
| 1. The gap | reference budget, estimate, gap in euros and as a percentage, excluding VAT, at the same price date | comparing a budget from one date with an estimate from another |
| 2. The causes | breakdown of the gap into prices, quantities and brief, with the items concerned | an overall gap with no explanation |
| 3. The options | 3 to 5 options, each with its saving, its risk and its effect on the programme | a single option presented as unavoidable |
| 4. The decision | options selected, new amount, date | an oral decision in a meeting |
| 5. The record | reference to the additional agreement if the brief changes | a decision taken without updating the agreement |
Heading 2 determines all the others. A gap that comes from prices is not dealt with in the same way as a gap that comes from the brief. If the causes are disputed, they must be established before the options are written.
Heading 5 is not a formality. The Grand-Ducal Regulation of 17 June 1992 on the code of conduct for architects and consulting engineers provides that any significant change to the brief "must be the subject of an additional agreement stating its financial impact" (art. 9, unofficial translation). The signed note is its natural basis.
Writing comparable options
Each option is described in the same way: what changes, item by item; the saving, costed at the same price date as the gap; the risk (use, operation, technical, reputational); the effect on the programme, in particular any redesign. An option with no costed saving is not an option, it is an intention.
An option can also consist of tendering on a wider scope, by including in the documents options or variants to be decided after the tenders. Their drafting follows its own rules, covered in the article on variants and options. In a public contract, an option reduces the firm commitment, not the estimated value of the contract, which includes "any form of option" (Law of 8 April 2018, art. 12, § 5, a)).
Accepting a higher budget is an option in its own right. It is costed (additional funding) and decided like the others, rather than imposing itself by default when the tenders are opened.
An entirely fictitious example
The amounts below are invented to illustrate the method. Works budget in the agreement: €2,000,000 excluding VAT. Estimate at the end of preliminary design, brought to the same price date: €2,300,000 excluding VAT. Gap: €300,000, or 15%. Breakdown: €60,000 in prices, €140,000 in quantities (circulation areas), €100,000 in brief (a multi-purpose hall added during design).
| Option | Saving | Risk | Effect on the programme |
|---|---|---|---|
| A. Remove the added multi-purpose hall | €100,000 | requirement not met | redrawing, about 3 weeks |
| B. Make the plan more compact and reduce circulation | €90,000 | rework of the layout | about 4 weeks |
| C. Replace the cladding with render | €70,000 | more frequent facade maintenance | none |
| D. Move the external works to an option in the tender documents | €80,000 less firm commitment | reduced external works if the option is not ordered | none |
| E. Raise the budget | none | additional funding of €300,000 | none |
Decision taken in the example: A, B and C, plus D. A, B and C reduce the estimate by €260,000, from €2,300,000 to €2,040,000. Option D brings the firm commitment down to €1,960,000, which is €40,000 below the budget. Ordering the external works would bring the amount back to €2,040,000, which is €40,000 above the budget: the client will decide in the light of the tenders. The additional agreement records the removal of the multi-purpose hall and the new budget arising from it.
For a municipality
The note prepares the council resolution. The municipal council approves the detailed final design, and "any subsequent significant departure from the detailed final design must be approved by the municipal council and the supervisory authority" (implementing Grand-Ducal Regulation of 8 April 2018, art. 147). If the trade-off takes place before approval, the note accompanies the design submitted to the council; if it takes place afterwards and changes the design significantly, it forms the basis of the new resolution.
After the decision
Three actions follow the signing of the note. Update the estimate, which becomes the reference for the next phase. Formalise the additional agreement if the brief has changed. Carry the selected options over into the tender documents, with a description precise enough for the tenders to be comparable. Checking the subsequent estimates then follows the method described in the article on checking the architect's estimate.
This article sets out the rules as they stood on the date of verification and is intended as professional guidance. It does not replace legal advice or an examination of the specific case.