VARIATION OR CHANGE ORDER

What is the meaning of variation order?

A variation order is a change, often in construction, that modifies all or part of an existing order. Many
construction projects undergo changes, especially after the beginning of building, and the cost impact
on a construction project with a variation order can be costly.

What is an extension of time?

If there is an Employer's delay, which is beyond the Contractor's control, and if this delay impacts the
Completion Date of the Works, the Contractor should be entitled to receive an Extension of Time (EOT).

What is the variation clause?

It is common in commercial contracts to include a provision that any changes made to a contract are
ineffective unless made in writing and signed by or on behalf of both parties. This is known as a variation
clause, and is intended to prevent informal or inadvertent oral variations.

A change order is work that is added to or deleted from the original scope of work of a contract, which
alters the original contract amount and/or completion date. A change order may fork a new project to
handle significant changes to the current project.

What is the site instruction?

A Site Instruction is an order given by the Head Contractor to a Sub-contractor, or client/client's

representative to the Head Contractor for the execution of work, purchase of goods, testing materials,
design issues, or other procurement activities.

What is the price variance?

Price variance is the actual unit cost of a purchased item, minus its standard cost, multiplied by the
quantity of actual units purchased. The price variance formula is: (Actual cost incurred - standard cost) x
Actual quantity of units purchased.

What is a Purchase Order?

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types,
quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a PO
to a supplier constitutes a legal offer to buy products or services.

What is a Provisional Sum?

A provisional sum is an allowance, usually estimated by the cost consultant that is inserted into tender
documents for a specific element of the works that is not yet defined in enough detail for tenderers to
price.

What is a Variation Cost?

VARIATION OR CHANGE ORDER

Cost variation is a very frequent phenomenon and is almost associated with nearly constructing all
wastewater projects. Maintaining steady cost projection on wastewater projects had been recently an
issue of serious concern, both to the client and project contractors.

What is a force majeure clause?

A “force majeure” clause (French for “superior force”) is a contract provision that relieves the parties
from performing their contractual obligations when certain circumstances beyond their control arise,
making performance inadvisable, commercially impracticable, illegal, or impossible.

What is prime cost sum in quantity surveying?

Prime cost sum is a sum provided for works or services to be executed by a nominated subcontractor, or
for materials or goods to be obtained from a nominated supplier. Such sums are exclusive of any profit
required by the main contractor and provision is made for main contractors profit addition

What is cost variance?

Cost variance is a way of showing the financial performance of a project. Specifically, it is the
mathematical difference between budgeted cost of work performed, or BCWP, and the actual cost of
work performed, or ACWP.