Question

give me significance of study of the research topic: Impact of variation order in construction project

Answer 1

CAUSES OF VARIATION ORDERS

Variation order is the deviation experienced in any project from base contract or work scope mutually agreed at contracting time . It is written agreement between the contracting parties that represent an addition, deletion, or revision to the contract documents, identifies the change in price and time and describes the nature of the work involved . Variation orders arise for a variety of causes, of which some causes are foreseeable and others are not. Many researchers have identified various causes of variation orders. As a results of literature review, a total of 18 causes were identified as discussed below.

Change of schedule: A change of schedule during the project construction phase may result in major reallocation of resources. A change in schedule means that the contractor will either be required to provide additional resources or keep some resources idle. In both cases, additional cost is incurred . Change in scope: Change of plan or scope of the project is one of the most significant causes of variation in construction projects . It is usually the result of inadequate planning at the project definition stage or because of lack of involvement of the owner in the design phase .

Owner’s financial problems: The owner’s financial problems can affect project progress . This problem often leads to change in work schedules and specifications, affecting the quality of the construction.

Impediment to prompt decision-making process: Prompt decision making is an important factor for project success. Failure to make the decision efficiently may result in the delay, causing the need for the change order due to cost increments.

Obstinate nature of the owner: A building project is the result of the combined efforts of the professionals involved, which have to work at the various interfaces of a project . If the owner is obstinate then this could cause major variations at the later stages of a project.

Change in specifications by the owner: Changes in specification is a common phenomenon in construction projects with inadequate project objectives. If these changes in the specification of the design or requirement are carried out, this leads to variations in the construction phase. Change in design by the consultant: A change in design improvement by the consultant is a norm in contemporary professional practice. Changes in design were frequent in projects where construction starts before the design is finalized . Such changes affect the project in various ways depending on the timing of the change.

Conflicts among contract documents: Conflict between contract documents can result in misinterpretation of the actual requirement of a project . It is essential that the contract documents are clear and precise. Insufficient details in the contract documents may result in delays to the project completion or cause variations in cost.

Design complexity: Complex designs require unique skills and construction methods. Complexity affects the flow of construction activities, whereas simpler and linear construction works are relatively easy to handle.

Inadequate working drawing details: To convey a complete concept of the project design, the working drawings must be clear and concise . Inadequate working drawing details can result in misinterpretation of the actual requirements for the project, causing variations in the project.

Change in specification by the consultant: Changes in specification are observed frequently in construction projects . Changes in specification results in variations to the project, leading to delay and increased overall cost. Unavailability of equipment: Unavailability of equipment is a procurement problem that can affect the project completion .

Shortage of skilled manpower: Skilled manpower is one of the major resources required for technological projects . Variations and delays may occur due to shortages of skilled labor.

Contractor’s financial difficulties: Construction is a labor intensive industry. Whether the contractor has been paid or not, the wages of the worker must still be paid. If a contractor experiences financial difficulties during the course of a project, it may result in lacking of resource availability. Consequently, the progress of the project is affected which may require variation and extension of time.

Poor workmanship: Defective workmanship may lead to demolition and rework in construction projects This results in delay and increased cost.

Poor procurement process: Procurement delays have various adverse effects on other processes in the construction cycle. Other processes in the construction cycle are affected by poor procurement processes. Consequently, variations are required.

Lack of strategic planning: Proper strategic planning is an important factor for successful completion of a building project . The lack of strategic planning is a common cause of variations in projects where construction starts before the design is finalized (e.g., in concurrent design and construction contracts

Inadequate design: Inadequate design can be a frequent cause of variations in construction projects.

EFFECTS OF VARIATION ORDERS

Delay in completion: Variations often hinder the project progress, leading to delay in achieving the targeted milestones during construction reported that a variation may delay the projects by 9% of the original scheduled time duration for projects. studying delay problems in construction projects of Hong Kong summarized that 50% of the projects surveyed were delayed because of variations. In reducing the delay of a project, the contractor would try to accommodate the variations by utilizing the free floats in the construction schedules.

Increase in project cost: Increase in project cost is regarded as the most common effect of variations Any alteration or addition is the design during execution of the project may results in demolition or rework of any project component and eventually increase the project cost ). Hence, in order to keep overall project cost unchanged; normally in every construction project a contingency sum is allocated which caters possible variations in the project. Further, variations require processing procedures, paper work and reviews before they can even be implemented . The process and implementation of variations in construction projects would increase the overhead expenses for all the participants concerned. Normally these overhead charges are provided for from the contingency fund allocated for the construction project.

Quality of projects: Variations affect the quality of work adversely reported that the quality of work is frequently affected by frequent variations because contractors have to compensate for the losses by cutting corners.

Causes rework: Variations in construction often results in rework and demolition if the variations are occurred during the construction is underway or even completed. This effect is to be expected due to variations during the construction phase while variations during the design phase do not require any rework or demolition on construction sites.

Logistics delays: Variation may cause requirement of new or additional amount of material and equipments which results in logistics delays mentioned that logistics delays are among the significant effects of variations in construction projects.