buildings

Article
A Proposed Model for Variation Order Management in
Construction Projects
Esam M. H. Ismaeil 1,2, * and Abu Elnasr E. Sobaih 3,4, *

1 Civil and Environmental Department, College of Engineering, King Faisal University,

Al-Ahsa 31982, Saudi Arabia
2 Architecture and Urban Planning Department, Faculty of Engineering, Port Said University,
Port Said 42526, Egypt
3 Management Department, College of Business Administration, King Faisal University,
Al-Ahsa 31982, Saudi Arabia
4 Hotel Management Department, Faculty of Tourism and Hotel Management, Helwan University,
Cairo 12612, Egypt
* Correspondence: [email protected] (E.M.H.I.); [email protected] (A.E.E.S.)

Abstract: This study aims to identify the causes of excessive change orders and their impact on
public construction projects in Saudi Arabia. This should support the organizations working in the
construction industry to improve variation order management (VOM) as a preventive action by
dealing proactively with variation order causes. Therefore, a new methodology was proposed to
minimize change orders and their impact on the successful completion of projects as well as cost
during the project lifecycle. The methodology involved ten selected turnkey building projects at King
Faisal University (KFU) campus, Saudi Arabia. Statistical analyses were conducted to predict the cost
overrun in project size and contract value. The findings showed the most significant causes leading to
variation order in public construction projects. These include the combined effect of the designer and
owner technical committee, designer document, and owner stakeholder committee. Hence, a new
model for VOM was developed as a best practice approach, including three stages. The first stage is
the initiation process, which includes seven procedures, seven tools, and key responsibilities. The
second stage deals with the course of change orders based on a certain number of procedures and
weight for each parameter assigned to this phase. It supports decision processes based on a certain
Citation: Ismaeil, E.M.H.; Sobaih,
average ratio of weights calculation. The third stage is the decision to support decision makers in
A.E.E. A Proposed Model for
proceeding or not proceeding with the variation order. Although the present study was conducted
Variation Order Management in
in Saudi Arabia’s public building construction project, it is envisaged that these research results are
Construction Projects. Buildings 2024,
widely applicable to other developing countries. The paper presents a direction for further research
14, 726. https://doi.org/10.3390/
buildings14030726
to enhance the impact of cost overrun in public sector construction projects in developing countries,
i.e., Saudi Arabia.
Academic Editors: Wenzhe Tang,
Wenxin Shen and Jin Xue
Keywords: change order; construction projects; Saudi Arabia; variation order; variation order
Received: 14 January 2024 management (VOM)
Revised: 3 March 2024
Accepted: 5 March 2024
Published: 8 March 2024
1. Introduction
In the construction industry, several change orders are issued during the project life
Copyright: © 2024 by the authors.
cycle, mainly due to ambiguous client requirements mentioned in the contract, incomplete
Licensee MDPI, Basel, Switzerland. tender contract documents, and design errors [1,2]. However, extensive change orders result
This article is an open access article in cost overruns, schedule delays, lower productivity, and conflicts, leading to arbitration
distributed under the terms and and litigation [2,3]. Construction projects address geography, site conditions, communities,
conditions of the Creative Commons physical environments, existing infrastructure, and many stakeholder requirements [1].
Attribution (CC BY) license (https:// Construction projects are considered long-term complex projects, which are character-
creativecommons.org/licenses/by/ ized by a dynamic nature [2,3]. Construction projects include multiple organizations, like
4.0/). the owner, the consultant for the design work, the main contractor, subcontractors, the

Buildings 2024, 14, 726. https://doi.org/10.3390/buildings14030726 https://www.mdpi.com/journal/buildings

Buildings 2024, 14, 726 2 of 22

supervision consultant, suppliers, manufacturers, and administrative and in some cases

government agencies, who interact together with bidding documents, contract conditions,
drawings, specifications, and bills of quantities, [1,3]. Relationships and obligations among
the organizations intertwine in a way that may or may not be expected during the contract-
ing stages, resulting in difficulties and problems leading to changes, controversial claims,
and conflict among the organizations. However, this negatively affects the completion
of the project by a specific time and increases the estimated cost and target quality [4,5].
Change is defined as any deviation from an agreed-upon scope and schedule [6]. Variation
orders are considered common issues that most frequently occur in construction projects
due to the complex nature of the construction industry, albeit they influence various aspects
of construction projects [7,8].
Variation order is any contractual modification by the owner’s teams related to the
project. It is one of the few tools the project manager contractually has to accommodate.
This includes unplanned occurrences once the project is under construction [9]. It involves
an amendment and deviation from the original contract scope and often causes disputes
and dissatisfaction [9,10]. Variation orders involve alteration, addition, omission, and
substitution in terms of quality, quantity, and work schedule, which significantly affect
cost and time overruns [11,12]. The change orders are the most frequent cause of claims,
with a 55% importance index, while delay had an essential index of 52.5% [13]. It was
argued that variation order management needs more formalized knowledge approaches to
be well applied in the Saudi construction industry starting from the design stage [14,15].
This includes correcting and modifying the original work scope and affecting overall
project performance.

1.1. Variation Order Types

There are four types of variations. The first type is directed changes from the client to
the contractor to perform contract specifications modification or addition to the original
work scope. The second type is constructive changes as an informal authorizing mod-
ification act to void the failure contract. The third type is beneficial variation orders to
improve the quality standard and manipulate cost, schedule overrun, and optimize the
client’s benefits against the resource. The fourth type is compensation for negative impacts
from international and local crises on enhancing the client’s project value, performance,
and degree of project control difficulty [8,16–19]. The purposes served by variation orders
include changing contract plans and contract specifications, administrative purposes of
establishing extra work, contract unit price adjustments, proposals for cost reduction in-
centives from value engineering method, payment after settlement of claims, payment
changes, and modifications to the contract schedule, item quantities, design mistakes, and
unit prices [20].

1.2. Variation Order Sources and Causes

The variations sources include the construction performance organizations, resources,
environmental conditions, and contractual issues. Additionally, cost and overhead over-
runs, professionals’ team turnover, and quality improvement lead to variations at various
project stages [21]. The causes of variation order also include mismatch between contract
documents and work done, unexpected problems, site conditions, inadequate design,
change in specifications, preliminary working drawings, changes in design by the con-
sultant, ambiguous design details, lack of coordination, change in methods, substituting
materials and procedures, errors and omissions in design, and changes in project scope due
to owner requirements [21,22]. The control of construction project change orders causes
and impacts, which average 10–15% of the contract value, include the amount of change;
the degradation of productivity and costs; site personnel’s lack of awareness, skills, and
knowledge; and substantial adjustments to the contract duration. All of these variables
influence variation order, claims, and total direct and indirect costs. These variables also
Buildings 2024, 14, 726 3 of 22

include the value of alteration, addition, omission, and substitution in terms of quality,
quantity, and work schedule [23–26].
The negative impacts of variation orders include project cost increase, overhead ex-
penses increase, invoice delays in logistics processes, blemishing of reputation, poor safety
conditions, degradation of quality of productivity, procurement delay, official disputes,
delay in completion schedule, cost overruns, owner’s financial problems, impediments to
the decision-making processes, design document complexity changes, insufficient working
drawing details, skilled human resources shortage, contractor’s financial difficulties, and
source of disputes [27–29]. The most significant percentage of claims and disputes in the
Gulf areas, especially Saudi Arabia, Oman, and the United Arab Emirates, are variation
orders. These include new client requirements (78%), variations in quantities (74%), contrac-
tor work delay (74%), design errors or omissions (72%), and drawings and specifications
inconsistencies (70%) [12,13,24,30].

1.3. Variation Order Procedures

The main goal of any change within the project lifecycle is to achieve a better state in
the future than the current state. It also aims to maximize the desired benefit, improve the
financial or competitive capabilities, improve the quality of procedures, achieve customers’
requirements, and fulfill the contract obligations even if this increases the cost and effort [31].
Inappropriate study and evaluation of variation orders can directly lead to failure, re-work,
time and money wasting, the uselessness of the project, and contract problems resulting
from claims and disputes [32,33]. The most critical claims and dispute sources encountered
by the project team through the project execution processes are the ongoing conflicts among
tender documents [34]. The concept for executing variation orders in construction projects
has international procedures, i.e., the International Federation of Consulting Engineers
(FIDIC) chapter (1/13), which explains that the contractor must respond in official writing
for any project engineer proposal request stating reasons for inability to comply. Otherwise,
they have to provide specific requirements according to Chapter 12 unless the engineer
issues his/her instructions or agrees to (7/13) from the FIDIC adjustments for changes
in legislation, i.e., the proposal of the program works under Item 8/1 and affects the
completion period, calculates the change value, and responds to the contractor’s proposal
based on Item 13/2 from the FIDIC considering modified cost increase/decrease [35–42].
The traditional process of variation orders includes three stages (Figure 1), starting with
the input procedures (closed rectangular and rhombus shape), passing through the process
flow procedures, and reaching the output documents. Stage 1 (with dashed rectangle) is
the input stage, which includes the change request form and the change requests follow-up
record form. Stage 2 is the process flow stage, which includes submitting a change request,
logging in the change request, reviewing the request and determining the person who
shall study it, notifying the concerned organizations of the change request, studying and
technically reviewing the change request and determining its impact on the project cost
and time, specifying the approval or disapproval by the concerned authority, recording
the final result, and updating the tender documents. Stage 3 (with dashed rectangle) is the
output stage (the wavy and cross rectangle shape), which includes change request, record
follow-up, technical study of change, analytical study of costs, updated timetable, and
approved change order [32,43].
 to project management, i.e., coordination efficiency; contract interpretation; and contract
documents understanding. Fifth is variation orders related to local authorities, i.e., third-
party decision; governmental laws; site access restrictions; and relocation for utility. Sixth
Buildings 2024, 14, 726
is variation orders related to force majeure, i.e., unexpected matters from nature and4hu- of 22

man behavior [44–49].

Figure 1. Common variation order procedures [32].

Figure 1. Common variation order procedures [32].

The causes of variation orders attributed to the construction project organizations are
classified into six categories. The first category is variation orders related to the owner, i.e.,
additional requirements; technically disrupted or interrupted work; financial difficulties;
performance expedition request; delay in actions; and value engineering study. The second
Buildings 2024, 14, 726 5 of 22

includes variation orders related to the designer/consultant, i.e., document revisions;

omissions or errors; insufficient details in the design document; unanticipated works;
contract discrepancies; availability of the systems and materials; scope definitions; site
conditions; and restrictions on the work method. Third is variation orders related to the
contractor, i.e., omissions in construction procedures; work remediation; sequence of the
work; late delivery for material and equipment; schedule time mistakes, financial conflicts;
skilled labor lack in market; and unexpected risks. Fourth is variation orders related to
project management, i.e., coordination efficiency; contract interpretation; and contract
documents understanding. Fifth is variation orders related to local authorities, i.e., third-
party decision; governmental laws; site access restrictions; and relocation for utility. Sixth is
variation orders related to force majeure, i.e., unexpected matters from nature and human
behavior [44–49].
A variation order must be a written agreement for process modification, adding or
otherwise changing the work from the original contract outlined [50,51]. The change or
modification ranges between a 10% increase and a 20% decrease in the contract items
budget, and the limits of the contract are stipulated clearly in the contract, related to works
of the same quality, and are necessary for the full completion of the project [35,52].
The procedures of the sequence of change variations when the value exceeds a speci-
fied rate of the total contract start by submitting a claim from the contractor to re-study the
rates and takes place from the project start date until the primary handover, as defined in
items (3–13) from the FIDIC of the general conditions for FIDIC contracts. Before issuing
the primary handover certificate, the engineer can change the work through the instructions
he issues or request that the contractor submit a proposal [35,53–56]. The implementation
of change orders after the engineer issues instructions according to his approval of any item
of work may include changes in quantities, quality, characteristics, standards, cancellation,
addition, providing machines/materials/services, tests, and sequences [26,57]. The varia-
tion orders implementation must adhere to submitting an immediate notice supported by
data and information [8,14,34]. This includes specifying a new price for a new item in the
bill of quantities. Therefore, the new price can be derived based on the work items related
to that item; otherwise, it can be estimated with a reasonable cost plus a reasonable profit
margin [41,57].
The proposition of this study is as follows: change orders in projects are one of the most
decisive and influential factors in delaying the implementation of construction projects
and one of the most important sources of claims and disputes for compensation due to an
extension of time or cost. This proposition has sub-propositions. The owner’s ability to
change the requirements and make amendments by deducting some contract items and
adding some new ones is one of the most significant sources of claims for compensation
over time and cost. The designer’s lack of suitable preparation of documents, whether for
design work, estimation of quantities, or conflict of documents, is one of the most important
causes of variation orders and sources of claims and disputes. Identifying the sources of
changes in the engineering disciplines (architectural, civil, mechanical, and electrical) of
construction projects at the beginning of the project and during its implementation on a
periodic basis is one of the most important approaches to controlling the sources of change
orders. Presenting a specific integration procedures model for managing and controlling
variation orders supports the owner’s organization in avoiding overrun of time, cost, and
scope, and therefore reduces the risks of claims and disputes. The study proposes a new
methodology to minimize the impact of excessive change orders on the project completion
cost during the project lifecycle. The study draws on an analysis of 10 recent projects
conducted at a public university (KFU) in Saudi Arabia.

2. Methodology
The construction industry encounters several variation orders issued during the project
lifecycle, which are often managed in a traditional way of processing by the organization
management team (see Figure 1). Change orders mainly affect cost overruns and schedule
Buildings 2024, 14, 726 6 of 22

delays. Hence, organizations in the construction industry need to improve variation order
management processes as preventive processes to deal with the variation order causes.
Therefore, the study methodology was built practically in two stages. The first stage
included discovering all gaps and reasons that cause variation orders inside the ongoing
case study construction project by conducting an analysis of 10 selected implemented
construction projects with different functions. The second stage is the formation of a
robust and practical guide model for variation order management and control to support
construction industry organizations in overcoming variation order risks.
The first stage included selecting 10 construction projects (selected from 33 imple-
mented projects on the KFU city campus, Saudi Arabia, from 2020 to 2022). The study
draws on interviews with construction organization experts working on these projects.
It relied on comprehensive numerical analysis using several types of software, i.e., Excel
spreadsheets v11.0, Revit v 24.1.11.26, AutoCAD v 24.2, and Primavera v 23.12. The main
purpose was to evaluate all change orders occurring within the execution processes of the
selected 10 projects’ original tender documents and as-built documents. The study precisely
revealed the variation order causes and cost overrun from the original tender contract
budget and conditions. The analysis classified the variation order causes in all construction
disciplines. Therefore, the volume and rate of changes in each project were studied based on
final invoices, which include initial tender quantities items, variation order quantities items,
and the final as-built quantities items of all the disciplines implemented until the project
primary handover. The analysis process with Excel spreadsheets was used to determine
the types of changes for all items listed in the final invoices to identify and calculate the
status of the following items:
• The items with no changes based on the tender design.
• Increased quantities of items beyond the tender design and the effect on additional changes.
• Decreased quantities of items from the tender design and the effect on deduction change.
• New items, the new items inside the tender design, and the effect on addition or
deduction changes.
• Omitted items from the tender design and the effect on addition or deduction changes.
The study used Excel sheet calculation for analyzing the types of change that have
been matched according to the final invoices and approved change orders. The study
analyzed the changes in types, sizes, and item rates in each discipline level in the CSI bill
of quantities divisions. The change rate was determined based on the financial cost of the
engineering disciplines (structural/architecture/mechanical/electrical) inside each project.
The second stage in methodology started based on significant procedures, which include
the following:
(a) Interviews were conducted with project managers (contractors, consultants, and
the project management office of the owner KFU-PMO to verify the reasons and
conditions for the changes and to classify the effects of quantities, cost, and ratio that
occurred in each discipline as significant findings.
(b) Classifying the phases of VOM approach in two phases includes the initiation pro-
cesses phase and the variation order course processes phase based on a certain number
of procedures and weight for each parameter assigned to this phase to support deci-
sion processes based on a certain average ratio of weights calculation. Applying VOM
supported the decision maker of the case study campus organization in the ongoing
32 projects, which positively reduced the negative impacts of the variation order on
cost and schedule overrun issues and presented a comprehensive and robust model
in the construction industry that can be adopted and updated according to project
conditions. Figure 2 shows the study method flowchart.
Buildings2024,
Buildings 14,x726
2024,14, FOR PEER REVIEW 7 7ofof23
22

Objective A Proposed Model for Variation Order Management

in Construction Projects

Case study Variation order quantities,

megaproject campus case
financial budget, for ten
study in Saudi Arabia construction projects

statistcal analysis for impacts on

Methodology stages
roots causes of variation engineering
orders disciplines

Software for Analysis Excell, Premavera

spreadsheet

Effects identification all

Identification all
variation order Experts infelunces on
types
Interviews

Results phases variation order management (VOM) phases

• The initiation process stage, which includes 7 procedures, 7 tools, and responsibilities
• The control procedures in variation order track to support decision makers

Figure 2. Study method flowchart.

Figure 2. Study method flowchart.
The main case study of this research is the KFU city campus, which was established
The main case study of this research is the KFU city campus, which was established as
as an integrated service campus. The case includes 35,000 students and about 5000 em-
an integrated service campus. The case includes 35,000 students and about 5000 employees.
ployees. It also contains many colleges, service buildings, infrastructures, and housing
It also contains many colleges, service buildings, infrastructures, and housing projects2 for
projects for boys and girls and staff housing. The project is located in an area of 4.5 km . It
boys and girls and staff housing. The project is located in an area of 4.5 km2 . It started with
started with the developed plan in 2004 until now, and the actual cost of the projects im-
the developed plan in 2004 until now, and the actual cost of the projects implemented so
plemented so far has reached more than 10 billion Saudi riyals. The campus layout con-
far has reached more than 10 billion Saudi riyals. The campus layout contains educational,
tains educational, infrastructure, healthcare, services, residential, and administrations
infrastructure, healthcare, services, residential, and administrations projects with different
projects with and
types, area, different types, area,
functions. Thus,and it isfunctions.
considered Thus,
as ait unique
is considered
mega as a unique
project and mega
not a
project and notproject.
stereotypical a stereotypical project.construction
These campus These campus construction
projects had been projects
designedhadby been de-
several
signed by several international and local designer offices located in
international and local designer offices located in different countries, i.e., Europe, USA, different countries,
i.e., Europe,
Japan, Egypt, USA, Japan,
Jordan, Egypt,
China, UAE,Jordan, China,Arabia.
and Saudi UAE, and Saudi Arabia.
Therefore, there isTherefore,
diversity in there
the
iscontract
diversity in the contract documents with different software. On the other
documents with different software. On the other side, there is also diversity in the side, there is
also diversity in the supervision and consultant offices for the projects,
supervision and consultant offices for the projects, reaching about 15 consultant offices. In reaching about 15
consultant
addition, thereoffices. In addition,
are different mainthere are different
contractors main contractors
and subcontractors shared and subcontractors
in the construction
shared
processes, reaching more than 70 organizations. The project execution status The
in the construction processes, reaching more than 70 organizations. at theproject
study
execution status at the study time includes [58–60] some projects
time includes [58–60] some projects that were implemented and handed over during that were implemented
and handedfrom
the period over2015during the period
to 2019, reaching from 2015
about 33 to 2019, reaching
projects; the projects about 33 projects;
under the
construction,
projects
totaling under construction,
21 projects; totalingunder
and the projects 21 projects;
designand
andthe projects
tender, under
totaling 11design
projects.and tender,
Therefore,
totaling
there are 11aprojects.
total of Therefore,
65 projects. there
Theare a total of
selected 65 projects.
projects sample Theincluded
selected 10
projects sample
projects with
included
different 10 projectsand
functions with different
goals. functions
The selected and goals.
projects ratio The selected
for the projects ratio projects
total implemented for the
total implemented
(33 projects) reached projects (33 projects)
approximately 30%reached approximately
within the study period. 30% within the study pe-
riod. Figure 3 shows the 10 selected projects from the General Master Plan–KFU–Al-Ahsa–
Saudi Figure
Arabia.3 shows the 10 selected
The selected projectsprojects
samplefrom the General
includes different Master Plan–KFU–Al-Ahsa–
construction project types,
Saudi
whichArabia.
includeThe selected
housing, projects
service, sample includes
academic, different construction
and administrative project
projects that havetypes,
been
which include and
implemented housing, service,
operated academic,
to enable and administrative
the study projects that
to obtain comprehensive andhave been
actual im-
results
plemented and operated to enable the study to obtain comprehensive and actual results
 4, x FOR PEER REVIEW 8 of 23
Buildings 2024, 14, 726 8 of 22

for discoveringfor
thediscovering
causes andthe routes
causes and routes of variation
of variation orders orders until each
until each engineering
engineering discipline
discipline
level of launching.
level of launching.

KING FAISAL
1
UNIVERSITY
8 7 CAMPUS LAYOUT

3 10 6 4 Selected case study

2

Figure 3. Selected 10 projects locations from General Master Plan–King Faisal University–Al-Ahsa–
Figure 3. SelectedSaudi
10 projects
Arabia. locations from General Master Plan–King Faisal University–Al-Ahsa–
Saudi Arabia.
The financial values (according to the contract value of the bill of quantities based
on the tender documents before handover processes and according to the final invoice
The financial values (according to the contract value of the bill of quantities based on
values from the contractor after submitting the primary projects handed over) include
the tender documents before handover processes and according to the final invoice values
the following:
from the contractor
■ Theafter submitting
financial theonprimary
value based the bill of projects
quantitieshanded over) include
= 1,196,916,993.70 the fol-
Saudi riyals
lowing: ■ The final financial value after the handover completion = 1,282,271,123.98 Saudi riyals
The final financial value of the change = 85,354,130.28 Saudi riyals; the final total change

■
The financial value based on the bill of quantities = 1,196,916,993.70 Saudi riyals
was 7.13%.
 The final financial value after the handover completion = 1,282,271,123.98 Saudi riyals
Table 1 shows the analysis for the variation orders for selected projects as a case study.
 The final financial
The data invalue
Table 1of the the
show change = 85,354,130.28
case study Saudi
addition quantity in ariyals;
million the
Saudi final total
riyals, the
change was 7.13%. quantity in a million Saudi riyals, the quantity of variation orders, the variation
deduction
order percentage, and the quantity of invoice items.
Table 1 shows the analysis for the variation orders for selected projects as a case
study. The dataTable
in Table 1 show
1. Analysis the case
of variation study
order addition quantity in a million Saudi riyals,
for 10 projects.
the deduction quantity in a million Saudi riyals, the quantity of variation orders, the var-
iation order percentage, and the quantity of invoice Variation Orders
items.
Addition Deduction Invoice
Study Case Project VO Quantity Value Item
Million Million Saudi
Number Percent % Quantity
Table 1. Analysis of variation order
Saudifor 10 projects.
Riyals Riyals
1 Dormitories (Boys and Girls) 20.3 12.2 5 10 2090
2 Main Administration Variation Orders
2.3 6.8 8 8.4
3 Mosque 2.3
Invoice600
Item
udy Case Project Addition Million Deduction Mil-6.8 VO Quantity
8 Value 8.4 330
4 Computer sciences college (Boys) 11.2 1.4 9 8.7 Quantity
610
5 Computer sciencesSaudi
collegeRiyals
(Girls) lion
15.9Saudi Riyals
11.7 Number11 Percent %
3.9 1156
6 and Girls)Science college20.3
itories (Boys 11.2 12.2 11.3 5 11 10 0.3 1208
2090
7 English language 4.9 4.1 12 0.1 1026
ain Administration
8 Education college 2.3 14.5 6.8 8.5 8 15 8.4 3.2 600681
Mosque9 Activity (Boys) 2.3 17.6 6.8 7.8 8 12 8.4 4 330326
10 Activity (Girls) 17.7 7.9 12 5.5 485
er sciences college (Boys) 11.2 1.4 9 8.7 610
er sciences college (Girls) 15.9 11.7 11 3.9 1156
The highest addition quantity was in the dormitories (boys and girls) project with
Science college 11.2 11.3 11 0.3 1208
20.3 million Saudi riyals, and the lowest quantity was in the main administration and
English language 4.9 4.1 12 0.1 1026
Education college 14.5 8.5 15 3.2 681
Activity (Boys) 17.6 7.8 12 4 326
Activity (Girls) 17.7 7.9 12 5.5 485
Buildings 2024, 14, x FOR PEER REVIEW 9 of 2
Buildings 2024, 14, 726 9 of 22

quantity was in the education college project with 15 VO, and the lowest variation orde
mosque projects, with 2.3 million Saudi riyals. The highest deduction quantity was in the
quantity was
dormitories in and
(boys the girls)
dormitories (boys
project with and
12.3 girls)Saudi
million project withand
riyals, 5 VO. The highest
the lowest quantityvalue per
centage was in the dormitories (boys and girls) project, and the lowest value
was in the English language project with 4.1 million Saudi riyals. The highest variation percentage wa
in thequantity
order Englishwaslanguage project. The
in the education highest
college value
project withof15invoice
VO, and item
the quantity was 2090 item
lowest variation
and the
order lowestwas
quantity value wasdormitories
in the 326 items. This
(boysanalysis explored
and girls) project awith
significant
5 VO. Thegaphighest
in dealing wit
value percentage was in the dormitories (boys and girls) project, and
variation order processes inside the campus according to different influences the lowest value
from all or
percentage
ganizationswas in the English
involved languageand
in designing project. The highest
managing thesevalue of invoice item quantity
projects.
was 2090 items, and the lowest value was 326 items. This analysis explored a significant
gap in dealing with variation order processes inside the campus according to different
3. Results and Discussions
influences from all organizations involved in designing and managing these projects.
3.1. Analysis of Change Order Types
3. Results and Discussions
The data from 10 projects were analyzed to investigate the realistic variation orde
3.1. Analysis of Change Order Types
causes to build variation order management processes as prevention, and controlling fo
anyThe data
issue fromto10a projects
leads were analyzed
new project variationtoorder.
investigate the realistic
The results of thevariation order
five types of change
causes to build variation order management processes as prevention, and controlling for
indicate that the total percentage change was 7.13%, and the change types can be clarifie
any issue leads to a new project variation order. The results of the five types of changes
as follows:
indicate that the total percentage change was 7.13%, and the change types can be clarified
Type
as 1: No change items implemented based on the original design and contract docu
follows:
ments
Type 1: Nowith rate items
change 18.65% and arithmetic
implemented based average 18.58%.
on the original Thisand
design means that
contract 81% of the draw
documents
ing rate
with and 18.65%
original design
and for all
arithmetic the study
average sample
18.58%. projects
This means has
that been
81% changed.
of the drawing and
original
Type 2:design for all
Quantity the study
increase sample
with rate projects
+ 20.72% has
ofbeen changed.
the total value of projects according to th
Type 2: Quantity
bill of quantities increase with rate +average
and arithmetic 20.72% ofofthe total value of projects according to the
22.97%.
bill
Typeof quantities
3: Quantityanddecrease
arithmeticwith
average of 22.97%.
−10.87% of the total value of projects according to the bi
Type 3: Quantity decrease with −10.87% of the total value of projects according to the bill
of quantities and arithmetic average of −10.79%.
of quantities and arithmetic average of −10.79%.
Type4: 4:
Type New
New items
items withwith a of
a rate rate of + 8.94%
+ 8.94% of the project’s
of the project’s total
total value value according
according to the bill ofto the bi
of quantities
quantities and arithmetic
and arithmetic averageaverage
of 9.56%.of 9.56%.
Type5:5:Deducted
Type Deducted items
items withwith a rate
a rate of −11.66%
of −11.66% of theof thevalue
total total of
value of projects
projects according according
to t
thebill
the billofof quantities
quantities andand an arithmetic
an arithmetic average
average rate ofrate of −10.47%.
−10.47%.
Figure
Figure4 shows the total
4 shows percentage
the total of eachof
percentage change
each type analysis
change typeinanalysis
the 10-construction
in the 10-construc
project case study.
tion project case study.

Items Change status %

Vo omitted No items
items, change,
-11.7% 18.65%

Vo new
items, 8.9%

Vo quality Vo quality
decrease, increase,
-10.9% 20.7%

Figure4.4.The
Figure The total
total percentage
percentage of each
of each change
change type analysis
type analysis in the
in the case case
study study project.
project.

The statistics analysis investigated each discipline deeply in each change type to in
vestigate the details of changes that lead to the negative and/or positive variation orde
The analysis led to the following results. Figure 5 shows a comparison of all total tende
BOQ values, actual BOQ values, and total change percentages for each project in the stud
case.
Buildings 2024, 14, 726 10 of 22

The statistics analysis investigated each discipline deeply in each change type to
investigate the details of changes that lead to the negative and/or positive variation order.
The analysis led to the following results. Figure 5 shows a comparison of all total tender
Buildings 2024, 14, x FOR PEER REVIEW
BOQ values, actual BOQ values, and total change percentages for each project10inofthe 23
study case.

Figure 5. Tender BOQ value, the actual BOQ, and total change % for each project in the case study.
Figure 5. Tender BOQ value, the actual BOQ, and total change % for each project in the case study.
In
In the no change
the no change category,
category, the
the highest
highest value
value was
was inin the
the computer
computer sciences
sciences college
college
(girls) project with 31.6%, and the lowest value was in the main administration
(girls) project with 31.6%, and the lowest value was in the main administration project project
with
10.4%. With regard to the VO quantity increase percentage, the highest value waswas
with 10.4%. With regard to the VO quantity increase percentage, the highest value in
in the
the activity
activity building
building (boys)(boys) project
project with with
42.5%,42.5%,
and theand the lowest
lowest value
value was in was in the science
the science college
college
project with 9.4%. Regarding the VO quantity decrease percentage, the highestthe
project with 9.4%. Regarding the VO quantity decrease percentage, highest
value was
value
in the was in the dormitories
dormitories (boysproject
(boys and girls) and girls)
withproject
−14.5%, withand−14.5%, and the
the lowest valuelowest
was invalue
the
was in the
English Englishbuilding
language language building
project withproject
9.4%. with 9.4%. Regarding
Regarding the VOofquantity
the VO quantity new items of
new items percentage, the highest value was in the main administration
percentage, the highest value was in the main administration building project with 23.9%, building project
with
and the23.9%, andvalue
lowest the lowest
was in value was in
the science the science
college buildingcollege building
project project
with 9.4%. with 9.4%.
Regarding the
Regarding
VO omittedthe VO omitted
quantity items quantity
percentage,items
thepercentage,
highest valuethewas
highest
in thevalue was in the
dormitories dormi-
(boys and
tories (boys and
girls) project girls)
with projectand
−12.5%, with −12.5%,
the lowestand the was
value lowest
in value was inproject
the activity the activity project
(girls) with
(girls) with −0.3%. Figure 6 shows the analysis status for each change type
−0.3%. Figure 6 shows the analysis status for each change type for each study case project. for each study
case project.
Buildings
Buildings 14, 726
2024,2024, 14, x FOR PEER REVIEW 11 23
11 of of 22

Figure 6. The analysis status for each change type for each study case project.
Figure 6. The analysis status for each change type for each study case project.
3.2. The Design and Tender Document Quality
The designer’s work on the design documents influenced all case study projects in
increasing and decreasing item types, which caused variation orders. The total designer
effect on the design document of dormitories (boys and girls) was 45.5%, the percentage for
 3.2. The Design and Tender Document Quality
The designer’s work on the design documents influenced all case study projects in
Buildings 2024, 14, 726 increasing and decreasing item types, which caused variation orders. The total designer
12 of 22
effect on the design document of dormitories (boys and girls) was 45.5%, the percentage
for increasing item types was 31%, and the percentage for decreasing item types was
−14.5%. Theitem
increasing totaltypes
designer effectand
was 31%, on the
the percentage
design document of the main
for decreasing administration
item types was −14.5%. pro-
ject was 35.5%; for increasing item types, it was 22%, and for decreasing
The total designer effect on the design document of the main administration project was item types, it was
−13.4%. Theincreasing
35.5%; for total designer effect iton
item types, wasthe22%,
designanddocument
for decreasingof the
item mosque
types, itbuilding
was −13.4%.project
was
The44.9%, the percentage
total designer for design
effect on the increasing item types
document was 34.5%,
of the mosque and for
building decreasing
project was 44.9%, item
types, the percentage
the percentage was −10.4%.
for increasing itemThe typestotal
was designer
34.5%, effect
and for ondecreasing
the designitem document of the
types, the
computer was −10.4%.
percentagesciences college Theproject
total designer
(boys) effect on the design
was 33.8%; documentitem
for increasing of thetypes,
computer
it was
sciences
21.8%, andcollege project (boys)
for decreasing item was
types,33.8%;
it was for−11.9%.
increasing
Theitem
totaltypes,
designer it was 21.8%,
effect on theanddesign
for
decreasing
document ofitem types, it was
the computer −11.9%.
sciences The total
college designer
project (girls)effect
was on 22.4%;the design document
for increasing item
types, it was 15.4%, and for decreasing item types, it was −7%. The total designer effectit on
of the computer sciences college project (girls) was 22.4%; for increasing item types,
was 15.4%, and for decreasing item types, it was −7%. The total designer effect on the
the design document of the science college project was 16.6%; for increasing item types, it
design document of the science college project was 16.6%; for increasing item types, it
was 9.4%, and for decreasing item types, it was −7.2%. The total designer effect on the
was 9.4%, and for decreasing item types, it was −7.2%. The total designer effect on the
design document of the English language project was 17.2%; for increasing item types, it
design document of the English language project was 17.2%; for increasing item types, it
was
was10.3%,
10.3%,andandforfor decreasing
decreasing item item types,
types,ititwas was−−6.9%.
6.9%. TheThetotal
totaldesigner
designer effect
effect ononthethe
design
designdocument
documentof ofthe
the education college project
education college projectwas was28.7%;
28.7%;for forincreasing
increasing itemitem types,
types, it it
was
was 18.1%, and for decreasing item types, it was −10.6%. The total designer effect on thethe
18.1%, and for decreasing item types, it was −10.6%. The total designer effect on
design
designdocument
documentof ofthe
the activity project (boys)
activity project (boys)was was54.2%;
54.2%;forforincreasing
increasing item
item types,
types, it was
it was
42.5%,
42.5%,and
andfor
fordecreasing
decreasing itemitem types,
types,ititwaswas−−11.7%. Thetotal
11.7%. The totaldesigner
designereffect effect onon thethe design
design
document
documentofofthe theactivity
activity project
project (girls) was 38.9%;
(girls) was 38.9%;forforincreasing
increasingitem itemtypes,
types, it was
it was 24.5%,
24.5%,
andfor
and fordecreasing
decreasing itemitem types, itit waswas−−14.3%.
14.3%. Figure
Figure77shows
showsthe thestatistical
statisticalanalysis
analysis forfor
designer and design document effects on causing variation orders
designer and design document effects on causing variation orders in the case study pro- in the case study projects
to investigate
jects the weakness
to investigate the weakness gatesgates
to be toavoided.
be avoided.

Figure
Figure7.7.Statistical
Statisticalanalysis
analysisfor
fordesigner
designerand
anddesign
designdocument
document effects on causing
effects on causing variation
variationorders.
orders.

Therefore, the level of inefficiency and lack of preparation quality of contract docu-
ments is because of the inaccuracy of the inventory of quantities. This led to the difference,
which is greater than the proportions allowed contractually and is the responsibility of the
designer office and the participants in the preparation of documents for the tasks of the
Buildings 2024, 14, 726 13 of 22

designer to investigate the accuracy quality of the bill of quantities and non-conflicting
descriptions in the tender documents.

3.3. The Owner Team Changes

The owner’s work on the design documents influenced all case study projects in the
areas of new items and omitted item types, which caused variation orders. The total owner
effect on the design document and execution procedures of dormitories (boys and girls)
was 18.3%, the percentage for new item types was 5.9%, and the percentage for omitted
item types was −12.5%. The total owner effect on the design document and execution
procedures of the main administration project was 51.3%; for new item types, it was 23.9%,
and for omitted item types, it was −27.4%. The total owner effect on the design document
and execution procedures of the mosque building project was 42.7%; the percentage for
increasing item types was 22.7%, and the percentage for decreasing item types was −19.9%.
The total owner effect on the design document and execution procedures of the computer
sciences college project (boys) was 14.5%; for new item types, it was 6.6%, and for omitted
item types, it was −7.9%. The total owner effect on the design document and execution
procedures of the computer sciences college project (girls) was 19.3%; for new item types, it
was 15.4%, and for omitted item types, it was −11.9%. The total owner effect on the design
document and execution procedures of the science college project was 10.5%; for increasing
item types, it was 4%, and for decreasing item types, it was −6.5%. The total owner effect
on the design document of the English language project was 8.7%; for new item types, it
was 2.6%, and for omitted item types, it was −6.1%. The total owner effect on the design
document and execution procedures of the education college project was 19.5%; for new
item types, it was 7.6%, and for omitted item types, it was −12%. The total owner effect on
the design document and execution procedures of the activity project (boys) was 5.1%; for
new item types, it was 4.8%, and for omitted item types, it was −0.3%. The total owner
effect on the design document and execution procedures of the activity project (girls) was
10.5%; for new item types, it was 10.2%, and for omitted item types, it was −0.3%. Figure 8
shows the statistical analysis for owner and design document and execution procedures
effects for causing variation orders in the case study projects to investigate the weakness
gates to be avoided.
The influence of the owner’s changes in new and omitted items must be justified
technically and financially. There is a joint effect for the designer and the technical authority
team of the owner from the changes. The rate of the absolute increase in work, whether by
increasing the quantity or the development according to the needs of the projects, represents
(22.97% + 9.56%) = (+32.53%) for the increase in quantities, whereas the absolute rate of
deduction in the work, whether by reducing the quantity or eliminating it by canceling
items according to the needs of the projects, represents (10.79% + 10.47%) = (−21.26%).

3.4. The Changes in Disciplines Scope and Value

The analysis of the variation orders at the engineering disciplines level indicates
significant results in civil, architectural, mechanical, and electrical engineering disciplines
according to change types. The total change in the civil discipline reached about 14.14%.
Buildings 2024,
Buildings 14,14,
2024, x FOR
726 PEER REVIEW 1414 of 23
of 22

Figure
Figure8.8.Statistical
Statisticalanalysis
analysisfor
for owner and design
owner and designdocument
documentand
andexecution
execution procedures
procedures effects
effects forfor
causing variation orders.
causing variation orders.

while
Whilethe
thepercentages
percentages for thecivil
for the civildiscipline
discipline related
related to the
to the no change
no change category,
category, quan-
quantity
tity increase
increase category,
category, quantity
quantity decrease
decrease category,
category, quantity
quantity newnew
itemsitems category,
category, and omit-
and omitted
ted quantity
quantity items items category
category were, were, sequentially,
sequentially, 1.76%, −28.31%,
1.76%, 28.31%, 11.58%, −11.58%, −5.93%.
3.34%, and3.34%, and
The total
−5.93%. Thechange in the architectural
total change discipline
in the architectural reached about
discipline reached9.6%, while
about the percentages
9.6%, while the per-
for the architectural
centages discipline discipline
for the architectural related to the no change,
related to thequantity increase,
no change, quantity
quantity decrease,
increase, quan-
quantity new items, and omitted quantity items categories were, sequentially,
tity decrease, quantity new items, and omitted quantity items categories were, sequen- 11.5%, 18.9%,
−11.14%,
tially, 11.5%,16%,
18.9%, −14.1%. The
and −11.14%, 16%, total
andchange
−14.1%.in The
the mechanical
total change discipline reached about
in the mechanical disci-
−
pline reached about −6.1%, while the percentages for the mechanical disciplinecategory,
6.1%, while the percentages for the mechanical discipline related to the no change related to
quantity increase category, quantity decrease category, quantity new items category, and
the no change category, quantity increase category, quantity decrease category, quantity
omitted quantity items category were, sequentially, 37.58%, 16.3%, −15.2%, 36%, and
new items category, and omitted quantity items category were, sequentially, 37.58%,
−10.2%. The total change in the electrical discipline reached about 6.25%, while the
16.3%, −15.2%, 36%, and −10.2%. The total change in the electrical discipline reached about
percentages for the electrical discipline related to the no change category, quantity increase
6.25%, while
category, the percentages
quantity for the electrical
decrease category, quantitydiscipline
new itemsrelated to the
category, andno changequantity
omitted category,
quantity increase category, quantity decrease category, quantity new items
items category were, sequentially, 36.52%, 18.2%, −4.8%, 9.3%, and −16.5%. In Figure 9, category, and
omitted quantity items category were, sequentially, 36.52%, 18.2%,
the total change percentage for each discipline is compared with each change type in the−4.8%, 9.3%, and
−16.5%. In Figure
study case’s 9, the total change percentage for each discipline is compared with each
projects.
change type in the study case’s projects.
Buildings 2024, 14, 726
x FOR PEER REVIEW 1515of
of 23
22

Figure 9. Total change % for each discipline compared with each change type in the study case’s projects.
Figure 9. Total change % for each discipline compared with each change type in the study
case’s projects.
The change rate in the architectural discipline was according to owner requirements
to beThematched
changewith new
rate in the technology
architecturaland modernized
discipline in the sections
was according to ownerofrequirements
metalwork,
wooden works,
to be matched doors
with newand windows,
technology andfinishes, special
modernized in works, and of
the sections furniture. Thewooden
metalwork, change
rate in civil
works, doorsworks
and was based on
windows, redesigning
finishes, specialthe foundation
works, structure The
and furniture. calculation
change andratein-
in
creasing quantities
civil works for on
was based excavations andthe
redesigning backfilling.
foundation The change rate
structure in the electrical
calculation works
and increasing
that encountered
quantities changes was
for excavations and based on redesigning
backfilling. The change therate
electrical
in the loads to be
electrical matched
works that
with mechanical and electrical equipment, as well as increasing the wiring,
encountered changes was based on redesigning the electrical loads to be matched with cables, and
electrical
mechanical choices. The change
and electrical rate in the
equipment, mechanical
as well worksthe
as increasing that encountered
wiring, changes
cables, and was
electrical
based
choices.onThe
redesigning the in
change rate mechanical loads works
the mechanical to be matched with mechanical
that encountered changes equipment
was based
from the suppliers,
on redesigning as well as increasing
the mechanical loads to bethe ducting,
matched firefighting,
with mechanical and plumbingfrom
equipment fixtures
the
choices.
suppliers, as well as increasing the ducting, firefighting, and plumbing fixtures choices.

3.5. The
3.5. The Effect
Effect of
of Changes
Changes in in Projects
Projects on
on Claims
Claims and
and Disputes
Disputes
The sample
The sample of of projects
projects under
under study
study has
has not
not been
been subjected
subjected toto any
any kind
kind of
ofsuspension,
suspension,
force majeure, or lack of financial allocations from the owner during implementation,
force majeure, or lack of financial allocations from the owner during implementation, and and
there are no penalties or contractual deductions affecting the contractor.
there are no penalties or contractual deductions affecting the contractor. The claims for The claims for
financial cost have been compensated because of the increase in quantities
financial cost have been compensated because of the increase in quantities due to the de- due to the
designer
signer or or
thethe creation
creation ofof newitems
new itemsdueduetotothe
theowner
owneraccording
accordingto to the
the approved
approved change
change
orders, which have resulted in an increase in the cost of all projects compared
orders, which have resulted in an increase in the cost of all projects compared to the con- to the contract
valuevalue
tract in theinbill
theofbill
quantities.
of quantities.
The time claims
The time claims for for the
the project
project extension
extension have
have been
been compensated
compensated for for another
another period.
period.
The arithmetic average of the extension period to the original project period is 42.17%asasa
The arithmetic average of the extension period to the original project period is 42.17%
result of the approved changes in the increase in quantities and the creation of new items.
a result of the approved changes in the increase in quantities and the creation of new
Changes in general have resulted in improving the quality of all systems and materials
items. Changes in general have resulted in improving the quality of all systems and ma-
included in the various engineering departments, such as the architectural department and
terials included in the various engineering departments, such as the architectural depart-
electromechanical department, in line with the contemporary developments and technology
ment and electromechanical department, in line with the contemporary developments
of the project implementation lifecycle due to the large period between the completion
and technology of the project implementation lifecycle due to the large period between
phase of the design of all tender documents, the tender and awarding phase, and the start
the completion phase of the design of all tender documents, the tender and awarding
Buildings 2024, 14, 726 16 of 22

of implementation phase, so that many systems and materials have meanwhile developed
in the production market for engineering construction projects.

3.6. Variation Order Management (VOM) as a Proposed Support Methodology

Variation orders in construction projects are one of the most decisive factors affect-
ing delays in project implementation and one of the most essential sources of claims and
disputes for compensation over time or cost. The results from the analysis of 10 selected
completed projects representing 30% of the ongoing construction campus projects empha-
size study questions about the reasons for change orders leading to claims or disputes.
The analysis shows the impacts numerically on each variation type (no change, decrease
quantities, increase quantities, new items, omitted items) and on each technical discipline
(architecture, civil, mechanical, electrical). This analysis takes into consideration the se-
quence of traditional variation control processes and proposes a new approach to make
decisive control for variation orders based on overcoming the gaps found in study cases that
lead to variation orders; this approach takes into consideration the results of the analysis
as follows:
• Weakness of the tender document’s preparation by the designer, whether for design
work, quantification, or conflict between documents, is among the most important
causes of changes/variation orders and sources of claims and disputes.
• An integrated and quantitative specific system of procedures helps the owner to
manage and control changes and variation orders in a planned manner at the entire
project level and not in a partial phase.
• Using preventive control for variation did not depend on the work progress.
• Procedures to avoid lack of technical and financial control over time, cost, quality, and
scope reduce the risk of claims and disputes.
The study proposed a quantitative system to adopt VOM before or within the project
start date and site preparation. The flow of processes of this model was designed in three
stages as follows:

3.6.1. Procedures in the Initiation Process Stage

This stage includes a proactive process conducted and shared with all involved orga-
nizations’ teams after awarding the contract to the lowest-price contractor. This process
acts as the first preventative action to avoid variation orders from the start date of the
project. The process is divided into procedures, consequent responsibilities, and tools
for each procedure, which means preparing the procedures, responsibilities, and tools
during the initiation stage of the project implementation to discover the potential changes
in the execution process stage. The process is considered to be precautionary measures
derived from the previous analysis of the projects selected as a documented case study
of a large vital project established in Saudi Arabia. This initiation process stage includes
the following:
• An inventory of the architectural, civil, electrical, and mechanical works, comparing
them to the tender documents, which is the responsibility of the contractor and
needs the approval of the supervising authority and the owner using the Building
Information Modeling (BIM) and REVIT program.
• Presenting and approving long-term item schedules (long lead items) for all disciplines,
anticipating the time of supply and installation, which are the responsibility of the
contractor and require the approval of the supervising authority and the owner using
the PRIMAVERA program.
• Specifying the cost of the architectural, civil, electrical, and mechanical works, which is
the responsibility of the supervising authority and requires the approval of the owner
using the bill of quantities and specifications.
• Specifying the influence of stakeholders on approving, which is the responsibility of
the owner using meetings and specific models.
Buildings 2024, 14, 726 17 of 22

• Specifying a record of previous risks, which is the responsibility of the owner using
site surveys, interviews, presentations, and site visits.
• Specifying a list of approved suppliers and sub-contractors, which is the responsibility
of the owner using site surveys, interviews, presentations, and site visits.
• The approval of all calculations for structural, mechanical, and electrical systems is the
responsibility of suppliers and subcontractors and requires the approval of the owner
using programs such as SAP.

3.6.2. Procedures for Dealing with the Course of Change Orders Stage
This stage is divided after the need to submit the change order, based on either new
items or increases in quantities. In both cases, sequential procedures are used that end with
a quantitative determination that controls the approval or disapproval of the change orders.
In the case of new items, a series of procedures can be followed as follows:
• Conducting the initial determination of the reason for the request to make a variation
order if it is a formal request from the stakeholders, improving the quality or techno-
logical progress or an inevitable technical necessity, and then agreeing to continue the
study with technical and financial analysis or refusing to study the change order.
• Procedures for studying and analyzing the quantitative criteria, technically and finan-
cially, to determine the degree of approval or disapproval of a change order, which can
be controlled through the four main focuses in the project management methodology
(quality, cost, lifecycle, and project scope).
• Inspection by the specialists of technical, financial, and contractual analysis: first, the
quality department to prove compliance with the technical specifications of the item
with a rate of 30%; second, the scheduling department to study the impact on the
project time and supply and installation time with a rate of 30%; third, other technical
departments for determining the impact and technical and financial relationship with
a rate of 20%; fourth, the department of accounting and finance to determine its
impact on the cost of the technical department with a rate of 10%; and fifth, using
value engineering to study alternatives for cost, supply time, installation time, and
technical compliance with item specifications at a rate of 30%. Figure 10 illustrates the
methodology of the VOM approach as a significant finding for this study.

3.6.3. Procedures for the Decision Stage

This stage is the final decision from the organization’s decision maker and its commit-
tee according to the summation of the variation order qualitative impact after gathering
all qualitative impacts from all related departments; therefore, the approved status for the
item has a summation qualitative impact of over 75%.
The results showed that traditional analytical diagrams (Figure 1) are commonly used
in most construction projects. However, there are no technical and financial procedures
that can be used as a proactive step to reduce or minimize the excessive volume of change
orders. In addition, there are no updated programs or software used in technical analysis
and comparison in conjunction with the financial study according to market prices. Further-
more, there is no evidence of how to adjust the financial balance of previous competitors
participating in the project implementation competition, which does not lead to potential
judicial disputes [45]. This study focuses on change order management and controlling
inside construction project processes and the difficulty encountered in the project manage-
ment processes in variation order control and management. Therefore, the practical model
based on a comprehensive analysis of one mega project provided a best practices approach,
including three stages or phases to eliminate and control variation order influences within
the lifecycle of a project. The first phase includes procedures in the initiation process stage,
which includes seven procedures, seven tools, and key responsibilities. The second phase
includes procedures for dealing with the course of the change orders stage. The third phase
includes procedures for the decision stage to support decision makers in proceeding with
the variation order or not.
Buildings 2024, 14, 726 18 of 22
Buildings 2024, 14, x FOR PEER REVIEW 19 of 23

1 PROCEDURES IN INITIATION PROCESS STAGE

PROCEDURES RESPONSIBILITY TOOLS

1. Bidding document and actual quantity comparison for archi- 1. Contractor, consultant, 1. REVIT software, expert, and
tectural, civil, mechanical, and electrical work owner project teams
2. Submission and approving long lead items supply installa- 2. Owner, consultant 2. Primavera software
tion 3. Owner, consultant 3. Meetings
3. Determination of the stakeholder influences 4. Consultant, owner, sup- 4. Bill of quantities, specifica-
4. Determination of the architectural, civil, mechanical, and plier, sub-contractor tions, Primavera software
electrical work cost 5. Consultant, owner 5. Meetings, lessons learned
5. Determination of the risk register 6. Consultant, owner 6. Vendor list modification
6. Determination of approved suppliers and subcontractor list 7. Consultant and owner 7. SAP, HAP, ETABS software
7. Approval of the architectural, civil, mechanical, and electrical teams of tender document.
system calculation data

2 PROCEDURES IN VARIATION ORDERS COURSE

VARIATION ORDERS VO ASSESSMENT

INCREASING OR DECREASING QUANTITIES NEW ITEM

DETERMINATION OF THEIR INITIAL DETERMINATION

IN CASE OF CONTRACT
RELATIONSHIP WITH PROJECT OF THE VO REQUEST
QUANTITY INCREASE
INVENTORY USING BIM
OR DECREASE

FORMAL REQUEST QUALITY ADVANCED TECHNICAL

CANCEL NO FROM STAKEHOLDERS IMPROVEMENT TECHNOLOGY NECESSITY

YES

RELEVANT TECHNICAL SCHEDULING DEPARTMENT: OTHER TECHNICAL FINANCIAL & ACCOUNTING

DEPARTMENT: EFFECT ON THE PROJECT TIME & DEPARTMENTS: DEPARTMENT:

COMPLIANCE WITH THE TIME OF SUPPLY & DETERMINATION OF THE • DETERMINATION OF THE

TECHNICAL SPECIFICATIONS INSTALLATION IMPACT OF THE TECHNICAL IMPACT ON THE CONTRACT

AND FINANCIAL BUDGET

EFFECT RATIO 25% EFFECT RATIO 15% EFFECT RATIO 15% EFFECT RATIO 15%

USING VALUE ENGINEERING TO STUDY ALTERNATIVES FOR COST, SUPPLY TIME, INSTALLATION TIME, AND

TECHNICAL COMPLIANCE WITH ITEM SPECIFICATIONS EFFECT RATIO 30%

3 DECISION

CANCEL= VO RATIO LESS THAN 75% APPROVED = VO RATIO MORE THAN 75%

Figure 10. A proposed methodology for variation orders management.

Figure 10. A proposed methodology for variation orders management.

The study results submitted a robust variation order model enabled the client techni-
cal representative team to conduct several efforts and changes related to several aspects
on purpose to eliminate and control the occurrence of variation orders. These aspects
Buildings 2024, 14, 726 19 of 22

include contractual aspects, including modification of the design contract document and
the bidding document for consultant and contractor for the organizations working on
the remaining 32 projects of the case study. These modifications include the contractual
aspects, the environmental aspects, and the social aspects. The contractual aspects in-
clude the design phase and execution phase for each project throughout the main five
project documents. These consist of the bill of quantities, specifications, drawings, and
general/special conditions to improve the accounting of quantities, avoid document con-
flicts, adjust delivery time and installation time in each project’s scheduled time for the
long lead items, and conduct value engineering methods and processes. Therefore, the
client obligated all designers to update the design software to Revit software, improve the
input data in Primavera software, conduct value engineering processes, identify the risk
items in long lead items supply and installation, identify authorized stakeholders, improve
tracking procedures in the project schedule from purchase order until installation for each
item, and identify and approve the deliverables processes and commitment with project
scope procedures. Thus, the client committee, after applying VOM, discovered significant
numerical results in variation order quantity and its influence on the deduction of the
remaining project budget, with a total average of 68%. Whereas, in the study case sample
project (10 projects), the additional items causing the additional project budget was 11.79%
(from Table 1), the deduction items causing the reduction in project budget was 7.85% (from
Table 1), and the average of the total VO quantity was 10.3. On the other side, in the study
case remaining project (32 projects), the client committee, after applying VOM, discovered
that the additional items caused the additional project budget to be 3.2% (from Table 1), and
the deduction items caused the reduction in the project budget to be 2.5% (from Table 1).
The average of the total VO quantity was 3.3. The environmental aspects improvement
appeared in the cohesive specifications between the manufacturing source in the vendor
list qualifications and the installing method in the all-discipline items. The social aspects
appeared in developing robust communication channels for all team members for the seven
organizations working on the campus, which include client, designer, consultant, main
contractor, subcontractor, supplier, and manufacturer.
The study provided the educational organizations in construction project management
with a robust model as lessons learned to mitigate the risks associated with construction
projects. This study provided the international and local organizations working in the con-
struction project management industry with a comprehensive model that can be updated
according to project conditions. This study provided the nonprofit international and local
organizations working on issuing project management guidelines with an update on the
processes of risk and integration management and chapters working in the construction
projects management industry with a comprehensive model that can be adjusted according
to project conditions. This study opens the gate for other studies to update the variation
order controlling models in commercial and healthcare projects, merging global economic
and environmental cost impacts on variation order, and compromising the global and local
crises with codes and contractual conditions can be another area of research.
These study results can contribute effectively to the Saudi Vision 2030, which has
three main pillars: a vibrant society, a thriving economy, and an ambitious nation. The
study results can contribute to the thriving economic pillar of the construction industry.
The study supports diversifying the economy in public investment with minimum risks in
the construction project budget, enhancing assets growth of the public investment fund,
and localizing edge technology and knowledge through the public investment fund with a
robust system for minimizing the occurrence of variation orders in construction projects.
The study contributes effectively to enhancing government effectiveness by presenting a
comprehensive method to control the construction project budget and the public balance
construction projects budget, which improves the performance of the government appa-
ratus in the construction industry. In addition, the study results contribute to enhancing
the effectiveness of financial planning and the efficiency of government spending in the
construction industry by enhancing the performance of government entities working in
Buildings 2024, 14, 726 20 of 22

the construction industry by developing a robust matrix for controlling the causes of cost
overruns in construction projects.
The study encountered several challenges, such as environmental culture. These
included discussions and negotiations about technical and financial solutions for variation
orders in the construction industry, stockholder interpretation in the financial and tech-
nical procedures of the construction projects, compensation difficulties from the related
ministries, technical weakness of the main contractor organization, and lack of updating
the construction project information from the consultant office. Despite the study being
limited and designed for specific conditions and types, VOM processes and procedures
contain flexibility and the possibility to be updated and adjusted for other construction
projects according to construction project conditions, location, time, client nature, financial
source, and organization type.

4. Conclusions
Variation orders in construction project management are one of the most complex
challenge processes for project success because of their direct influence on scope, time,
cost, and quality processes. The processes for prediction, prevention, and controlling the
variation orders in construction project management within the project lifecycle, starting
from the design phase until the handover phase, are a great concern for all construction
project organizations. Therefore, the study built a variation order management model
applicable to construction project processes based on financial and technical analysis for the
10 selected implemented construction project types and functions that constitute 30% of the
implemented construction project cost in the megaproject case study. The selected projects
in the case study contained 103 variation orders with a total cost of 86 million Saudi riyals.
Therefore, the study, based on interviews with experts, provided a comprehensive and
numerical analysis for the selected projects of the case study using several software and
documents, i.e., Excel spreadsheets, Revit, AutoCAD, and Primavera. Final invoices include
initial tender quantities of items, variation order quantities of items for all disciplines, and
the final as-built quantities of items to discover the variation order causes implemented in
all engineering disciplines until the project primary handover.
The results enabled the study to establish, develop, and classify a new model for the
VOM approach as a best practice approach. This approach includes three stages. The
first phase is the initiation process, which includes seven procedures, seven tools, and
key responsibilities. The second stage deals with the course of change orders based on
a certain number of procedures and weights for each parameter assigned to this stage
to support decision processes based on a certain average ratio of weights calculation to
support decision makers in proceeding with a variation order or not. The third stage is
the decision stage to support decision makers in proceeding or not proceeding with a
variation order. The study tested the results by applying VOM in the remaining 32 projects,
which supported the decision maker of the case study campus organization to eliminate
and control the variation order. The study contributes to the Saudi Vision 2030 in thriving
the Kingdom’s economy, albeit it opens the gates for several studies in variation order
management in the construction industry.

Author Contributions: Conceptualization, E.M.H.I. and A.E.E.S.; methodology, E.M.H.I.; software,

E.M.H.I.; validation, E.M.H.I. and A.E.E.S.; formal analysis, E.M.H.I.; investigation, E.M.H.I.; re-
sources, E.M.H.I. and A.E.E.S.; data curation, E.M.H.I.; writing—original draft preparation, E.M.H.I.
and A.E.E.S.; writing—review and editing, E.M.H.I. and A.E.E.S.; visualization, E.M.H.I. and A.E.E.S.;
supervision E.M.H.I. and A.E.E.S.; project administration, E.M.H.I.; funding acquisition, E.M.H.I. and
A.E.E.S. All authors have read and agreed to the published version of the manuscript.
Funding: This work was supported by the Deanship of Scientific Research, Vice Presidency for Grad-
uate Studies and Scientific Research, King Faisal University, Saudi Arabia [Project No. GRANT5447].
Data Availability Statement: Data are available upon request from the first author.
Conflicts of Interest: The authors declare no conflicts of interest.
Buildings 2024, 14, 726 21 of 22

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