Handling Contract Variations

Handling contract variations is a key aspect of civil engineering contract management, as
projects often encounter changes in scope, design, or unforeseen conditions. Here’s how to
effectively manage contract variations:
1. Understanding Contract Terms
 Review the Contract Clauses: Ensure you fully understand the contract’s provisions
related to variations, such as who can request variations, procedures for approval, and
how costs and time impacts are managed. Many contracts (like FIDIC) have clear
processes for handling variations.
 Identify Who Has Authority: Only authorized personnel, such as the project manager or
client representative, should request or approve variations.
2. Early Identification of Changes
 Monitor the Project Continuously: Regularly review the work progress, materials, and
design plans to spot any potential need for variation early on.
 Communicate Quickly: As soon as a potential variation is identified (e.g., change in
material, design adjustment, or unforeseen site conditions), notify all relevant parties
promptly.
3. Request for Variation (Variation Order)
 Formalize the Change: The party requesting a variation must submit a formal variation
request in writing, detailing the nature of the change, reasons for the change, and any
impact on project scope, time, and cost.
 Proper Documentation: Keep a detailed record of all variation requests, approvals, and
any related communication.
4. Evaluate the Impact
 Technical and Cost Assessments: Assess the variation’s impact on the project’s
technical aspects (e.g., design changes or additional work) and on costs. This should
involve quantity surveyors, cost estimators, and design engineers.
 Time Impact Analysis: Evaluate the impact on the project schedule. Some variations
might require time extensions, and this needs to be carefully considered and agreed upon.
5. Approval Process
 Obtain Approvals: Ensure that the variation is reviewed and approved by the necessary
parties as per the contract. This typically includes the client, project manager, and
consultants. Without formal approval, the contractor should not proceed with the
variation.
 Confirm Changes in Writing: Once the variation is approved, ensure that the changes
are reflected in an official variation order (also known as a change order) with all the
revised terms (cost, time, scope).
6. Cost Control and Adjustments
 Adjust the Contract Sum: After the variation is approved, adjust the contract value
accordingly. Ensure any extra payments for the additional work are reflected in payment
certificates or invoices.
 Monitor Cash Flow: Variations can affect the overall budget and cash flow of the
project. It’s crucial to update financial plans and ensure there’s adequate funding to cover
the variations.
7. Schedule Management
 Amend the Project Timeline: If the variation affects the project’s schedule, revise the
timeline to reflect the new deadlines and communicate the changes to all stakeholders.
 Mitigate Delays: Implement strategies to minimize delays caused by the variation, such
as reallocating resources or adjusting work sequences.
8. Quality Control
 Ensure Quality Standards: Variations, especially those related to materials or design,

should maintain or enhance the project’s quality. Testing and inspections should be
carried out to verify that the new work complies with the required standards.
9. Dispute Resolution
 Prepare for Disputes: Contract variations are a common source of disputes. Ensure you
have a clear mechanism in place for resolving disagreements about scope changes, cost,
or time implications. Many contracts include mediation, arbitration, or dispute boards for
resolving such issues.
10. Documentation and Record Keeping
 Maintain Clear Records: Record every variation, its cost, time impact, approvals, and
any supporting documentation (e.g., drawings, reports, site instructions). Proper
documentation protects all parties in case of future disputes or audits.
 Update Contract Documentation: All changes made due to the variation should be
reflected in the contract documents, drawings, and specifications.
11. Close Out and Final Accounts
 Finalize Payments: Once the variation work is completed, verify that it has been done
according to the specifications and approve final payments. Ensure that the variation
costs are settled in the final account.
 Close the Variation: Formally close out the variation by confirming that it has been
executed correctly, and update the project’s records accordingly.
Summary:
To handle contract variations successfully:
 Follow contract terms strictly.

 Identify and assess variations early.
 Use formal procedures for requesting, approving, and documenting changes.
 Carefully manage cost and time impacts.
 Ensure quality control and risk management throughout the process.
Being proactive, transparent, and organized in handling variations ensures that the project stays
on track and helps maintain good relationships between the client, contractors, and other
stakeholders.

Handling Contract Variations

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Handling contract variations is a key aspect of civil engineering contract management, as

1. Understanding Contract Terms

2. Early Identification of Changes

3. Request for Variation (Variation Order)

4. Evaluate the Impact

 Ensure Quality Standards: Variations, especially those related to materials or design,

10. Documentation and Record Keeping

11. Close Out and Final Accounts

To handle contract variations successfully:

 Follow contract terms strictly.

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