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CHAPTER 1

INTRODUCTION

1.1 Introduction

Variation order (V.O) is a matter that often happened in construction

projects. Variation order is exist since early developed century. Knowledge

about variation order is important especially as an engineer and project

planner. It is very important because variation order can inuence the

additional cost of projects.

V.O is a modi!cation of contract document that agreed by contractor

and client. Variation order is a"ected by many reasons. #ll of the reason

need to be identi!ed so the problem in the project management can be

reduced. V.O is matter that related to the change that involving cost$ wor%s

and time.

&he main purpose of this project is to identify the main causes of V.O

in road construction in 'abah. ithout loo%ing for alternative to solve this

problem$ the client (government) will bear the expensive cost which could

not be estimated and could not be avoided. &he tendency for very high

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occurrence of abandoned projects if the problem cannot be reduced. &he

losses imposed from variation order also identi!ed in this project.

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'o$ an e"ectively solution can be !nd out in order to prevent or

reduce variation order in road construction in 'abah.

1.2 Defnition

&here are some important term used in this project which are

commonly used in a civil engineering road construction. +roject is the wor%

or tas%s to be underta%en. &he process of project management is used to

deliver the outcome.

# variation (sometimes referred to as a variation instruction$

variation order or change order) is an alteration to the scope of wor%s in a

construction contract in the form of an addition$ substitution or omission

from the original scope of wor%s. #nother term$ variation order is a written

order from the client,s representative authori-ing a variation under the

terms of the contract.

#ccording to O/rien (011)$ Variation Order contains a set of

instruction which allows changes or modi!cations to be made to an earlier

agreement in terms of volume or nature of tas% to be carried out. #nother

de!nition$ variation order is any modi!cation to the contractual guidance

provided to the 2ontractor by the client or the clients representative

(#rain 3 +heng$ *445). In other terms$ +ersatuan #r%ite% 6alaysia standard

form of contract (+#6 01) in clause $ de!ne variation as an alteration or

modi!cation of the design$ 7uality or 7uantity of the wor%s as shown in the

contract drawings and described by or referred to in the contract bills.

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1.3 Background

&he road was !rst built during the reign of ;orth /orneo 2hartered

2ompany which also %nown ('yari%at /orneo >tara /ritish$ '/>/) in

'abah. &he main purpose of road during this era was to lin%ing economic

activities between the towns to the port. ?oad 2onstruction in 'abah was

developed slowly until independence during the formation of 6alaysia on

@ 'eptember 0@8. It is continue to develop until now. ;owadays$

roadway has been placed under administration of government. &here are

two types of road in 'abah which is 6alaysian Aederal ?oads 'ystem and

6alaysian 'tate ?oads 'ystem. 6alaysian Aederal ?oads 'ystem is the

main national road networ% in 6alaysia. #ll Aederal ?oads in 6alaysia are

under the purview of 6inistry of or%s (6O). #ccording to 6inister,s

Aunction #ct 0@0$ 6O responsible to plan$ build and maintain all Aederal

?oads ga-etted under the Aederal ?oad #ct 050. hile$ 6alaysian 'tate

?oads 'ystem are the secondary roads in 6alaysia. &he construction of

state roads in 6alaysia are funded by 6alaysian +ublic or%s Bepartment

(CK?) of each states.

Aederal Dovernment and 'tate Dovernment have a responsibilities

to maintain and ensure the 7uality and safety of the road in 'abah so that

it will be in good condition. ?epairs$ maintenance$ construction of road in

'abah was done on an annual basis. >sually$ the party that responsible in

this case +ublic or%s Bepartment (CK?)$ Bistrict 2ouncil or 2ity Eall. &his

wor% needs to be done so that road users can use it safely.

hen the government want to construct a road$ they will ma%e a

planning$ design$ cost estimating for the whole project. #fter that$ the

government will open tender to the contractor. #fter this process$ client

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will award the project to the chosen contractor. 2lient and contractor will

ma%e an agreement of contract duration$ wor%s and value of the project

which contained in the contract document.

In road construction project in 'abah$ (V.O) is often faced by the

contractor during the road construction process. &his led to the allocation

for the construction of roads in 'abah are not !xed. &he study by

2haroenngam et al (*448) of variation orders on construction projects

found that the average cost escalation Variation Order usually occurs after

the contract is awarded.

'ometimes$ the wor%s could not be continue due to unexpected

wor%s$ which will lead to V.O. &he project that experienced variation orders

incurred more than 51F delay and cost increases when compared to those

no variation orders (Koush%i et al$ *448). #ccording to #rain 3 +heng

(*445)$ variation order do not only a"ect project performance in terms of

time and cost$ they also adversely a"ect the 7uality$ health and safety and

professional relations.

&here are another e"ects when the variation order exist in

construction projects. #ccording to O/rien (001)$ variation order in

construction project can cause productivity degradation$ interruption$

delays and redirection of wor% that are associated with variation orders

have a negative impact on labour productivity and procurement delay.

'ometimes$ rewor% and demolition also re7uired when variation order

exists (2lough and 'ears$ 001). It also can damage the !rms reputation

(Ais%$ 00G< Kumaraswamy et al.$ 001).

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1. Pro!"e# $tate#ent

In this study$ the main causes of V.O along a road construction

project need to be identi!ed. Variation orders on construction projects

have the potential to unnecessarily increase the cost of construction.

'ome V.O wor%s must be carried out so that the overall wor% can be

continue to the project successful. &here are many V.Os cases happened

during the road construction project. V.O cannot be avoided completely

(6ohamed$ *44). It is important to identify the causes of V.O which may

occur during the road construction wor%. Identi!cation of their causes

might lead to their reduction$ possible elimination and subse7uent

improvement in overall project performance.

1.% O!&ecti'e(

&he objectives of this research areH

&o identify the main causes of Variation Order (V.O) for road

construction in 'abah.

&o determine the losses imposed from Variation Order (V.O).

&o determine the steps to avoid or reduce Variation Order (V.O).

1.) $co*e o+ ,ork

&he scope of this wor% generally focus on the main causes of

Variation Order of the project which has been complete. &his study also

determine the losses imposed for the Variation Order and to !nd out the

steps to avoid or reduce Variation Order. &he limitation of this study is that

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it will just be conduct for the road construction in 'abah between !ve to

ten years ago$ with around *4 projects.

CHAPTER 2

-ITERATURE REIE,

2.1 Introduction

Variation in construction industry have become a common practice where

almost every project is su"ering ('segawa et al. *44*). &here are many

author also intimate that V.O are common to all types of projects (&homas$

Eorman$ Be 'au-a$ and Javs%i$ *44*< Oladapo$ *44G). &he study of Coint

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Legislative #udit and ?eview 2ommission (CL#?2$ *44) on 844 road

construction project in Virginia revealed that average project change was

more than F. &here are many issues about V.O in construction industry.

&he nature and fre7uency of variations vary from one project to another

depending on various factors. (#rain and +heng$ *44@).

In this chapter$ some research is reviewed in which related with the causes

of variation order$ losses imposed due to variation order$ and steps to

avoid or reduce variation order in construction project. 6ost of the

previous research was focused on the general construction. &here are only

minority of previous research that focused on road construction.

*.* 2auses of Variation Order

&here were many causes of Variation Order in construction identi!ed

in many previous researcher. #ccording to ;diho%ubwayo ? et al.$ (*441)$

all of the causes can be categori-ed into = category which are owner

related variations$ consultant related variations$ contractor related

variation and other variation. 6oreover$ +atric% Keane et al.$ (*44) had

grouped the causes of variation order into three categories for the

contracting parties< Owner:related variations$ consultant:related variation

3 contractor:related variation where as non:contracting party:related

variation named as Mother variationN. #nother supportive statement$ #rain

3 +heng (*44@) has identi!ed four main origin agents of variation orders

which included client$ 2onsultant$ 2ontractor$ and other.

*.*. Owner ?elated Variation.

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#rain and +heng (*44@) noted that the client as the project initiator

plays a major role in the construction project from the inception to the

completion. #s a result$ clients inuence the li%elihood of the occurrence of

variation orders. 2lients anticipate the needs and objectives of projects$

establish the scope of wor%s and the re7uired 7uality standards.

*.*.. 2hange of +lan or 'cope

2hange of plan or scope of the project is one of the most signi!cant causes

of variation in construction projects (2II$ 004). It is usually the result of

inade7uate or insucient planning at the project de!nition stage or

because of lac% of involvement of the owner in the design phase (#rain et

al.$ *44=). If the objectives of the project are inade7uately de!ned$ it is

common that clients will tend to change their minds along the way

(;diho%ubwayo$ *441). &his type of changes is normally costly especially if

made later in the construction process.

*.*..* 2hange of 'chedule

# change in schedule means that the contractor will either be

re7uired to provide additional resources or %eep some resources idle. In

both cases$ additional cost is incurred (Ais%$ 00G< O/rien$ 001). #

change of schedule during the project construction phase may result in

major reallocation of resources. &here are numerous causes of schedule

change such as mar%et conditions$ user re7uirements$ or lac% of funding.

*.*..8 Ainancial +roblem

&here are certain V.O was caused by Owners Ainancial +roblem. In

construction$ !nancial is one of the important thing to ma%e the project

successful. &he project cannot be implemented without !nancial. &he

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owners !nancial problems can a"ect project progress. (2lough and 'ears$

00=< O/rien$ 001). Ainancial is necessary in all of wor%s such as

operation of machineries$ machineries maintenance$ payment of wor%ers$

uses of materials$ insurance$ and etc. ;evertheless$ there is also a

relationship between client !nancial and V.O. 'ometimes$ client had faced

an unexpected !nancial diculty during construction stage. &his situation

can force a client to ma%e changes in an attempt to reduce cost in order to

suite their conditions (;diho%ubwayo$ *441).

*.*..= Impediment to +rompt Becision:6a%ing +rocess

2lient or owner is the one who have the rights in decision:ma%ing.

2lient must ma%e a decision for any problem promptly. +rompt decision

ma%ing is an important factor for project success ('anvido et al.$ 00*<

Dray and Eughes$ *44). Aailure to ma%e the decision eciently may result

in the delay or waiting time which can lead to V.O due to cost increments.

It also give adverse e"ects on project performance.

*.*..5 2hange in 'peci!cations by the Owner

2hanges in speci!cation is a common phenomenon in construction

projects with inade7uate project objectives (O/rien$ 001). If these

changes in the speci!cation of the design or re7uirement are carried out$

this leads to variations in the construction phase.

*.*..@ 'ubstitution of 6aterials by the Owner

'ubstitution of material also by owner also may occur due to

inability of client to ma%e decision on the selection the appropriate type of

materials to be used in construction (;. 6ohammad et al.$ *44). &his type

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of changes normally results in additional time and claims by the

contractor.

*.*..G Obstinate nature of owner

2onstruction projects are resulted from the combined e"orts of the

various professionals wor%ing together at various interfaces of the project

(ang$ *444< #rain et al.$ *44=) and many times approval of the owner is

re7uired. If the owner is obstinate$ it can cause hindrances in wor%ing$ and

result in variations at the later stages of a project. It has signi!cantly

a"ected time and cost performance in construction projects.

*.*.* 2onsultant ?elated Variation

;diho%ubwayo and Eaupt (*441) observed that the consultant team

includes architects$ designers$ specialist engineers$ project managers$

surveyors$ 7uantity surveyors and construction economists. 6embers of

the consultant team have power to e"ect variation orders upon delegation

by the client or on their behalf. 2onsultant ?elated Variation usually

generated during design phase. 6endelsohn (00G) observed that

probably G5F of the problems encountered on site were generated at the

design phase.

*.*.*. 2hange in Besign by 2onsultant

# change in design improvement by the consultant is a norm in

contemporary professional practice (#rain et al.$ *44=). 2hanges in design

were fre7uent in projects where construction starts before the design is

!nali-ed (Ais%$ 00G). &hese changes inuence the project from a di"erent

aspect depending the time when changes are incurred.

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*.*.*.* Besign 2omplexity

If the design made by consultant is simple and clear$ it is very

helpful for labour to understand and execute the wor%. 2omplex designs

can cause misunderstanding and misinterpretation which lead to deviation

and re7uire uni7ue s%ills and construction methods to perform the wor%

(#rain et al.$ *44=). 2omplexity a"ects the ow of construction activities$

whereas simpler and linear construction wor%s are relatively easy to

handle (Ais%$ 00G). In other words$ if the complexity of the design

increases this will create more opportunities of variations in the project.

*.*.*.8 Inade7uate or%ing Brawing Betails

In achieving ecient wor%ing on the site$ it is very important to

have complete project design$ clear and concise wor%ing drawing (Deo%$

*44*). Inade7uate wor%ing drawing details can result in misinterpretation

of the actual re7uirements for the project (#rain et al.$ *44=) which

causing variations in the project.

*.*.*.= Lac% of 2oordination

#s a consultant$ coordination to a contractor especially in wor%

process is important to ma%e sure the result is following the speci!cation.

#ccording to #dnan Pnshassi et al.$ (*44)$ lac% of coordination is one of

the most important factor of V.O which under consultant related factor.

Lac% of coordination will inuence the 7uality of wor%s. Pvery scope of

wor% that need to be constructed by contractor re7uire a coordination from

a consultant. It is very important in a construction project to %eep strong

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and continuous coordination to ma%e sure all wor%s following according to

plan (#l:Bubaisi$ *444).

*.*.*.5 2onicts between 2ontract Bocuments

2onict between contract documents often results in

misinterpretation of the project re7uirements (2II$ 01@). Aor successful

projects$ it is important that the contract documents are clear and precise.

&his conict may be occur because of the tender documentation is not

carried out precisely to include comprehensive tender drawings$

speci!cations$ conditions of contract$ and bills of 7uantities that are

responsive to the proposed wor%s (Oloo$ *45). &his is due to di"erent

documents are drawn by di"erent engineers or design personnel during

the design phase of the project which can cause discrepancies in contract

documents (#l:Bubaisi$ *444).

*.*.*.@ Prror and Omission in Besign

It is impossible to create a 44F error free design. Are7uently$

among the many contract documents of the project$ some of detail was

mis:referenced or an incomplete speci!cation sheet. Besign errors which

are not recti!ed during the design phase will eventually appear and faced

in the construction phase by contractor where the impact can be more

severe than in the design phase (2happell and illis 00@). Besign

omission may lead to loss of productivity and delay of the project schedule

(#l:Ea-ami 01G).

*.*.*.G &echnology 2hange

&echnology change may inuence a consultant to initiate V.O.

Jimmerman and Eart (01*) stated that it is impossible to be

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%nowledgeable of all new materials and products that are constantly

entering the mar%et. 6ajority construction projects especially for the

project which have technology items might face this reason for change

especially if the time between design and construction is long. &he

technology used which speci!ed in the contract document is no longer as

same as the technology during the contractor start the construction which

may lead to V.O. Eowever$ it is not necessary to change whatever has

been speci!ed in the original design just to accommodate the new

technology$ material or product unless it gives impact to the function or

operation of the construction (Eamdan$ *4*).

*.*.*.1 Lac% of 2onsultants Knowledge of #vailable 6aterials and

P7uipment

#rain and +heng (*44@) and +atric% Keane et al.$ (*44) identi!ed that lac%

of consultants %nowledge of available materials and e7uipment is one of

the causes of V.O in which originated by consultant. Knowledge of

available materials and e7uipment is an important factor for developing a

comprehensive design (2ox and Eamilton 005< #ssaf et al.$ 00@). Buring

design stage$ consultant have an important role to choose a suitable

material for a certain design. &he lac% of construction %nowledge about

available materials and e7uipment may a"ect the project adversely

(#drian 018< #l:Ea-mi 01G).

*.*.*.0 2onsultant,s Lac% of Cudgment and Pxperience

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Knowledge and experience are the important criteria to be considered for

each personnel involve in the construction industry (Eamdan$ *4*).

+rofessional experience and judgment is an important factor for successful

completion of the construction project (2lough and 'ear 00=< OQ/rien

001). &he lac% of professional experience may increases the ris% of errors

in design and also during construction progress which also lead V.O to

occur. # consultant must have sucient experience and judgement when

involving in a construction project. It is important because of a

construction project have to deals with human life and properties$ safety

and health re7uirements (Eamdan$ *4*).

*.*.8 2ontractor ?elated Variation

'weeney (001) stated that it is the contractors responsibility to

advise the consultant to issue a variation order when a technical problem

is discovered. #ccording to 'weeney (001) a contractor may propose

alternative construction methods where his experience shows that the

proposed technology will not ful!l the desired !tness and function of a

design.

*.*.8. >navailability of P7uipment

2onstruction project involves many heavy wor%s that need to be done in

order to complete the construction. In order to carry out all of the wor%s$

various e7uipment are re7uired so that the wor% can be handle in smooth

way and faster. #vailability of ade7uate and sucient number of

e7uipments plays a major role in project success. 2ontractor sometimes

have limited number of e7uipment which they swipe from one project to

other. >navailability of e7uipment is a procurement problem that can

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a"ect the project completion (O/rien$ 001). &his problem also can lead

to variation order. #rain 3 +heng (*44@) indicated that unavailability of

e7uipment is one of the causes of V.O which originated by 2ontractor.

*.*.8.* +oor or%manship

+oor wor%manship is one of the problem faced to the contractor

which my lead to V.O (#rain 3 +heng$ *44@). 2ontractor must have a good

7uality wor%manship in order to ma%e a good 7uality construction. +oor

wor%manship may lead to demolition and rewor% in construction projects

(Ais%$ 00G< O/rien$ 001). >nsatisfactory wor%ing result re7uire

demolition and rewor% to repair the defect in construction which can cause

delay$ wasting material and increased cost.

*.*.8.8 Lac% of 'trategic +lanning

+roper strategic planning is an important factor for successful

completion of a building project (2lough and 'ears$ 00=). &he lac% of

strategic planning is a common cause of V.O in projects where construction

starts before the design is !nali-ed (O/rien$ 001). It imposes negative

e"ects in the project where execution wor%s are started before the design

wor% is completely !nished. &his is a common case in projects awarded

based on concurrent design and construction contracts (O/rien$ 001<

#rain$ *44=).

*.*.8.= +oor +rocurement +rocess

+oor procurement process reects the delays in procuring the

resources re7uired for the project. It exerts various adverse e"ects on the

construction cycle of activities (Ais%$ 00G). It can also result in the entire

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change of plan or replacement for speci!ed materials or e7uipments of

any project (#rain$ *44=).

*.*.8.5 2ontractors Ainancial Biculties

2onstruction is a labor intensive industry. 2onstruction wor% not only

rely on machineries. It is also re7uire group of labor to wor%s. &he labor is

paid for the wor%s they have done. hether the contractor has been paid

or not$ the wages of the wor%er must still be paid (&homas and ;apolitan$

005). If a contractor experiences !nancial diculties during the course of

a project$ it may result in lac%ing of resource availability regardless s%illed

or uns%illed labor. 2onse7uently$ the progress of the project is a"ected

which may re7uire V.O.

*.*.8.@ 'hortage of '%illed 6anpower

2onstruction projects highly depend on s%illed manpower for

performing technical activities (#rain$ *44=). Lac% in s%illed manpower can

slow down the wor%s and also ma%e mista%es in wor%ing which will a"ect

the project performance (6emon$ *4< #ssaf$ *44@).

*.*.8.G Bi"ering 'ite 2ondition

6any time$ contractor will encounter the di"ering site conditions.

'amantha (*44*) stated that during the construction of a project$

contractors often encounter subsurface or hidden conditions which were

not anticipated and which may have a major impact on the time and cost

of performing their wor%. Pxample of case that fre7uently occur$ a

contractor encounter roc% instead of soft soil which not indicated in the

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tender document. &his situation re7uire extra wor% for excavation need to

be perform by a contractor and the contractor have a right to claim a

compensation for the extra wor%s.

#ccording to 'teven and Baniel (*441)$ it is an owners obligation to

provide complete and accurate information to the contractor regarding

conditions at the construction site such as unanticipated geological

conditions$ water intrusion$ underground pipe or cable$ and other types of

impediments to the clearing$ grubbing and grading of the site. It also

might be owners do not learn as much about the site conditions as

possible before entering into the contract (Oloo$ *45). V.O can be claimed

by the contractor due to this problem.

*.*.= Other Variation

&here are also other variation that not related to participants neither

client$ consultant$ nor contractor. #rain and +heng (*44@) observed that

situations beyond the control of the contractual parties may give rise to

variation orders$ these include< weather conditions$ and safety

considerations$ change in government regulations$ change in economic

condition$ and unforeseen problems.

*.*.=. eather 2ondition

#dverse weather conditions can a"ect outside activities in

construction project (Ais% 00G< O/rian 001). eather 2ondition problem

is often faced during the construction which can lead to Variation Order in

2onstruction. 'ome of weather condition can be predicted in aspect time

of occurrence$ period of occurrence$ or type of weather condition. eather

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condition problem that commonly happened in construction such as hot

season$ high wind$ rainy season$ cold season and etc. 'ometimes$ the

contractor is forced to alter his wor% schedule due to weather conditions

such as high temperature or high winds (#l:Bubaisi$ *444). #ccording to

6ar% (*4*)$ the timing or se7uence of wor% in construction project can be

varied in order attempting to avoid inclement weather condition where the

weather pattern can be predicted. 'o that$ the contractor may claim the

VO for compensation according to contract terms.

*.*.=.* 'afety 2onsideration

If some safety aspects were overloo%ed during the design phase$

the owner or consultant may initiate a change to install additional safety

features in the facility (#l:Bubaisi$ *444). &his can not be di"erent from

any other design oversight$ except for the fact that safety is usually un:

compromised.

*.*.=.8 2hange in Dovernment ?egulation

&his type of causes is rarely happened in construction project but it

have possibility to occur. Local authorities may have speci!c codes and

regulations that must be adhered to. ;ormally the designer insures that

his design is in compliance with these codes. Eowever$ new regulations

may be issued between design and construction and may force some

changes to the original plan (#l:Bubaisi$ *444). 2odes such as

environmental or labor codes are revised periodically and the contractor or

facility owners are re7uested to comply.

*.*.=.= 2hange in Pconomic 2ondition

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+rice ination9uctuation of construction materials commonly occur

from time to time especially the materials imported from foreign country.

&he non:!xed currency will cause price ination9uctuation of the material.

Pconomy related with supply and demand in the construction mar%et is

unpredictable (Eamdan$ *4*). Pconomic conditions are one of the

inuential factors that may a"ect a construction project (Ais% 00G).

*.*.=.5 >nforeseen +roblem

'ometimes$ there are unforeseen problem that beyond the control

of sta%eholder that can lead to variation order. &here are many unexpected

tragedy such natural disaster$ war$ riot and other in which can inuence

the construction project.

?eferring to clause 5G.* in 2ondition of 2ontract$ +B Aorm *48#

(?ev. 9*44)$ an MPvent of Aorce 6ajeureQ is an event beyond the control

of both parties which are<

a) war (whether declared or not)$ hostilities$ invasion$ act of foreign

enemies<

b) insurrection$ revolution$ rebellion$ military or usurped power$ civil

war$ terrorism<

c) natural catastrophe including but not limited to earth7ua%es$ ood$

subterranean spontaneous combustion or any operation of the forces of

nature against which and experienced contractor could not reasonably

have been expected to ta%e precaution.

d) ;uclear explosion$ radioactive or chemical contamination or

radiation (unless caused by negligen act$ omission or default of the

contractor$ its agents or personnel)<

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e) +ressure waves caused by aircraft of other aerial devices travelling a

sonic or supersonic speeds< and

f) ?iot$ commotion or disorder$ unless solely restricted to employees of

the 2ontractor or its personnel$ servants or agent.

In view of the above and if there are any damages leads to rewor%$

contractor are eligible for the variation order.

*.8 Losses Imposed due to Variation Order

#rain and +heng (*445) di"erentiate two types of VO$ namely Mbene!cialN

and MdetrimentalN variation orders. # bene!cial variation order is one

issued to improve the 7uality standard$ reduce cost$ schedule$ or degree of

diculty in a project (#rain and +heng$ *445). hile a detrimental

variation order is one that negatively impacts the client,s value or project

performance (#rain and +heng$ *445). Betrimental variation order are

focused in this research which are related to losses impact.

&here are two major losses imposed due to VO based on previous research

which are time and cost aspect. /oth of the aspects are related to the all

causes of VO. #ccording to 6ohamed (*44)$ the more variation orders on

a project$ the greater the li%elihood that they become time consuming and

costly elements in construction projects. Eanna et al. (*44*) also found

that as a number of variation orders increases the more signi!cant

productivity losses become.

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*.8. 2ost

Losses are imposed in terms of cost in various ways when the VO

exist in construction project. #lmost all of V.O that exist in construction

project are related to cost aspect. Increment in the project cost is one of

the main e"ects observed of V.O (#rain and +heng$ *445). Eanna and

Dundu- (*44=) estimate that the >nited 'tates construction industry spent

>'B 8:*@ billion in year for construction V.O. 2II (004)< Esieh et al.

(*44=)< 6ohamed (*44)< ?anda et al. (*440)< Jeiton 3 Oberlender (008)

agreed that variation orders contribute to @:GF cost overruns in

construction projects. #ccording to #mirruddin et. #l$ (*4*)$ increase in

project cost is one of the most e"ect in roadway construction projects in

south of Iran.

&he increase in the project cost is caused by any major additions or

modi!cations to the design (2lough and 'ears$ 00=). Bemolition and

rewor% are example of e"ect of V.O in construction project where it re7uire

additional cost to be implemented (#l:Bubaisi$ *444). 'ome V.O will force

for demolition and rewor% to be done if any addition$ modi!cation or

change on design that have been constructed. Bemolition and rewor%

re7uire machineries and wor%er in which both of this need additional

payment. #dditional payment that exist to implement the demolition and

rewor% will cause cost overrun. 'ometimes$ the V.O exist in the

construction project$ new materials$ tools and e7uipment which not stated

in original contract are needed to implement wor%s that stated in V.O. and

it also re7uire additional cost.

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V.O also can cause increasing in overhead cost. V.O re7uire

processing procedures$ paper wor% and reviews before they can even be

implemented (O,/rien $001). &he process and implementation of

variations in construction projects would increase the overhead expenses

for all the participants concerned. ;ormally these overhead charges are

provided for from the contingency fund allocated for the construction

project.

*.8.* &ime

6ost of the researcher found that V.O can cause the delay or time

overrun in construction process. &here are several authors agreed that

variation orders present as one of the reasons for project time overruns

(2han and Reong$ 005< 6ohamed$ *44). V.O always disrupt the project

progress which leading to delay in achieving the targeted time of

completion (2II$ 005$ Ibbs$ 00G). V.O are the reason why most

contractors dont meet up with the time speci!ed for completion of most

contract wor%s (+ourrostam and Ismail$ *4< #mu et al$. *445). #ccording

to Jeiton and Oberlender (008)$ V.O may delay the projects about 0F of

the original scheduled time duration.

# study conducted by 'ambasivan and 'oon (*44G) showed that in *445

about G.5F (of government contract projects in 6alaysia) were

considered as sic% which is more than 8 month delay or abandoned. &he

losses in term of time was exist when the construction project encountered

a delay problem. &here are 54F construction project in Eong Kong were

delayed because of VO (Kumaraswamy et al.$ 001).

*=

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&here are several reason how VO can inuence the additional time in

construction such as rewor%$ material delivery and local authority

approval. V.O in construction often results in rewor% and demolition

(2lough and 'ears$ 00=). #dditional time was re7uired in rewor% and

demolition which must be done.

#nother e"ect of V.O in construction project is logistic delays. Logistic

delays are among the signi!cant e"ects of V.O in construction projects

(Eester et al.$ 00). V.O may cause the existence of new re7uirement or

additional amount of material and e7uipment which results in logistic

delays (Ais%$ 00G). &his additional amount of material and tools that

re7uired to carry out a certain activity sometimes need a period of time for

delivery or transportion to site construction. &he losses in term of time also

exist during the period of material transportation which can lead to

extension of time in construction project.

#ll V.O needs approval from local authorities before it can be implemented.

Local authority have a responsible to approve the V.O in construction

project and to ensure all developments comply with the laws and

regulations relates to the construction project. &he process of V.O approval

sometimes prolonged and may cause delays to the project (Eamdan$

*4*). Aactor of delay in local authority approval may be due to changes in

ocer in:charge and also 2hange of Dovernment policy.

*.= 'tep to #void or ?educe Variation Order.

*.=. 'elect 2ompetent 2onsultant 2ompany

2onsultant are the important parties which has a role as advisor to

the client in construction project. 2onsultant will give a technical advise to

the client about the whole construction project. Jou et al.$ (*445)$ studied

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the %ey ris%s in construction project and found that incomplete or

inaccurate cost estimate is directly related to the designer9consultantsQ

%nowledge and experience. 'o that$ selection of competent and

experience consultant company is very important. It is advisable to the

client to appoint those consultant based on their expertise and experience

to suit the type of projects to be implemented. /y choosing experienced

consultant could minimi-e the inaccuracy and also might avoid V.O.

*.=.* Pnhance 2ommunication and 2oordination

2ommunication and coordination is a management tool in construction

management which are important element and must be enhanced by all

parties involved in the project implementation. 2oordination and direct

communication will abolish design discrepancies$ errors and omissions in

design. It also provide an opportunity for professionals to review the

contract documents thoroughly which can help in eliminating the

variations arising because of conicts in contract documents (;or Eayati

Ibrahim$ *44@).

#ccording to Ea-rin Eamdan (*4*)$ +oor communication and coordination

will cause lost of data or information collection due to this should be a

teamwor% based. #ccording to Caspal et al.$ (*44)$ good coordination and

involvement of all professional parties and even the client is important in

developing creative and practical ideas which can minimi-e discrepancies

and resulting in V.O reduction. &he consultant has to update the contractor

of any concern he might have with the scheduled wor%. Other than that$

the ways to improve coordination can be done by carry out coordination

meetings$ progress reports$ and conference calls among others (#l:Bubaisi$

*444).

*@

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*.=.8 2lear and &horough /rief 'cope of or%

2lear and thorough project brief would be given to all participants involved

in the project especially to a consultant. # consultant will design the scope

of wor% included in the construction project based of clients re7uirement.

&hus$ 2lient should aware with what they want and the constraint they

might faced. >yun (*44G) remar%ed that it is sometimes very dicult to

determine the exact re7uirements of the client. &hat is the reason the

client should properly de!ne and brief to consultant on what are the

important re7uirements to be incorporated.

2lient should set a boundaries about the scope of wor%s$ established the

re7uirements$ !nancial constraints and de!ne the function of the projects

in order for the consultant to digest the information prior to the design

commencement process. 'o that$ consultant can give an advice about all

the clients re7uirement. 2lear and thorough project brief will assist in

eliminating V.O that may arise when the project had started and it may

assist in developing a clear scope of wor% for the parties that involved on

the project (#ftab et al.$ *4=)

*.=.= ?easonable Buration for +lanning and Besign

2onsultant need time to implement the tas% that should be done. #s a

consultant$ they need sucient time for planning and design stage. If

there are only short time given to consultant$ it is high probability of

mista%e that they will ma%e. &ime limitation may occasionally force the

designer to wrap up the necessary design wor% at lower 7uality (#l:

6ansouri 011). &he client should allocate the reasonable or practical

duration for the for planning and design stage$ in order to avoid design

*G

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fault$ to produce a 7uality tender document before the tender stage

(Ea-rin Eamdan$ *4*).

#ccording to Jou et al.$ (*445)$ client should prepare a practical

schedule which is sucient but not redundant time to accommodate all

design and construction activities to avoid Mtight project scheduleQ. &ime

and cost are always correlated in project. &he more period of the schelude$

the more cost will be utili-ed. # lengthy schedule will decrease the project

cost bene!t. &he client and consultant should not be in a hurry about

contract documentation and ensure the detailed architectural and

engineering drawing are made available to the 7uantity surveyor for

detailed bill of 7uantities before tender (#yodele Plijah Olusegun$ *44).

*.=.5 +roper Investigation 3 +lanning Buring +re:&ender

+roper investigation and ade7uate planning must be carried out

properly at the initial stage (in pre:tender period) in order to reduce V.O

(?anasinghe$ *4*). &he involvement of 7uali!ed profesional sta"$ such as

profesional engineers$ specialist and experts are important in early stage

in order to explain and provide solutions to technical circumstance.

#ccording to #ftab Eameed 6emon et al. (*4=)$ professionals should

participate from design phase to assist in clarifying the project objectives

and in identifying the noncompliance with their re7uirements at early

stages in order minimi-ing the occurrence of V.O in CK? projects.

Initial survey and site investigation such as visual inspection to site$ des%

study$ determining the standard to be used$ %nowing the history of the

site$ land surveying and soil investigation is a part of designing procedure

which need to be done in early stage which must be carry out properly.

Inade7uate or insucient site information such as soil report and survey

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report can a"ect the construction. +rior to any design scheme$ all relevant

test and survey with the government agencies and nearby buildings

should be conducted to ascertain the site conditions and reduce

unexpected ris%s (+atric% S.. Jou et al.$ *445).

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