Works on Site - Variations
A ‘Variation’ in a building contract (often referred to as a Variation Order – VO, or Change Order) is an alteration to the scope of works in the form of an addition, substitution or omission.
As night follows day, ALL construction contracts will vary from their original design, scope and definition during the course of the works on site.
Variations may give rise to additions, or deductions, from the Contract Sum.
Variations can result from:
- adverse ground conditions,
- unforeseen structural conditions (in the case of renovation projects),
- design changes,
- adjustment of Provisional Sums,
- compliance with Statutory/Planning Requirements,
- non availability of specified materials
Certain VO’s, particularly those involving adverse ground conditions, may also result in an extension to the agreed programme of works, known as an ‘Extension of Time’, or EOT, claim.
We recommend that all building contracts contain an adjustable ‘Contingency Sum’ to help mitigate the financial impact of Variations. This is usually 7.5% in the case of ‘new builds’, and 15% for renovation projects.
As Quantity Surveyors, we are not empowered to issue Variations, this is the responsibility of your Architect/Structural Engineer. We do however monitor and value these Variations by the issue of CVI’s (Confirmation of Verbal Instructions), which form part of our three weekly Valuation Report.