What is a variation order?
A variation order (VO) is a written instruction from the owner, or a consultant with that authority, to change the contracted works: add or omit an item, or change its quantity, specification, method or sequence. The contract sets who may issue it and within what limits; in FIDIC contracts it is covered by Clause 13 (Variations and Adjustments).
Where variations come from
- Owner requests: a change of use, areas or finish level.
- Design changes: gaps or clashes that appear when preparing shop drawings.
- Site conditions: soil or existing services that differ from the documents.
- Authority requirements: Civil Defense, municipality or Saudi Building Code requirements raised after award.
- Quantity changes: a remeasured contract pays for the executed quantity, while a lump sum contract only pays extra through a variation.
For the difference between the two, see lump sum vs remeasured contracts.
How a variation is priced
Most contracts set a clear order:
- Contract rates where the work is similar to an existing BOQ item under similar conditions.
- Rates derived from them pro rata where the work is similar but differs in size, quantity or conditions.
- A new rate from a build-up: materials, labour and plant, then overheads and profit at the same percentages as the tender where possible.
- Daywork for small items that are hard to measure, with daily sheets signed by the consultant.
A build-up backed by supplier quotations and labour output is approved faster than a lump figure. See item price build-up.
Time impact
A variation can add work on the critical path and delay completion. Request the extension of time together with the cost in the same submission, and prove the impact by inserting the variation activities into the approved programme (a fragnet) in Primavera P6 and analysing the effect on the completion date. Approving cost without time leaves the contractor exposed to delay damages. See the baseline programme in P6.
Records that protect your entitlement
- Instructions in writing from the person the contract authorises, with oral instructions confirmed by letter.
- Notice to the owner within the period the contract sets; some contracts bar the claim if notice is late.
- A VO register: number, description, value requested and approved, time impact and status.
- Site records: daily reports, dated photos and measurement records before and after the work.
- Revised drawings with a clear revision number, then updated as-built drawings.
Common mistakes
- Doing the work before written approval and negotiating the price after it is finished.
- Pricing additions and forgetting the omissions, so the whole request is rejected.
- Holding variations until the end of the project instead of settling them as they arise.
- Ignoring the effect of the change on other work already built or in progress.
Government projects
The Saudi Government Tenders and Procurement Law and its implementing regulations set limits on increasing or reducing the contract value and the approval steps. Check the current text and your contract conditions before you submit.
Frequently asked questions
What is the difference between a variation and a claim?
A variation is an owner instruction to change the works. A claim is a contractor request for extra cost or time for an event it considers to be the owner risk; an accepted claim may end in a variation order.
Should I do the work before the price is approved?
It is better to agree cost and time first. If the work must start at once, get a written instruction, submit your estimate and notice within the contract period, and record the work in daily reports.
How is work that is not in the BOQ priced?
From a rate derived from a similar contract item where one exists, otherwise from a new build-up of materials, labour and plant with overheads and profit, backed by quotations.
Can the contractor get more time with a variation?
Yes, if the change affects the critical path. It is shown by a time impact analysis on the approved programme and requested together with the cost.
