Abstract
A valuation of variation orders has become a daily task on large construction contracts. It is a norm where one of the contracting parties disagrees about the valuation of work done. Therefore, the valuation of variation orders has become one of the main causes of conflicts and disputes in construction management. The aims of study to determine the best practicing method in valuing a variation order for lump sum contract and identify the main related causes of variation project. The mixed method (interview and case study) of research was adopted in the collection of necessary data. Interview was conducted from 6 construction expert (clients) were analyzed. 6 case study building projects were selected by targeting sampling technique and used as the source of data for this study. The data were analysed with frequencies, sums and percentages. The study found that the client needs, lack of coordination during design and omission in design are the main causes of variation. An analysis of data indicated that used schedule of rate, fair market rate, daywork rate and negotiation are the four most famous method practicing in valuing a variation order in lump sum contract but its rely on the circumstances and the character of works.
Highlights
Variation orders involve additions, omissions, alterations and substitutions in terms of quality, quantity and schedule of works
Based on the findings of this study, it can be observed that the frequency of method of practicing valuing a variation order according for each works character are different
Several conclusions can be drawn as follows; one, the method for valuing a variation order for work is similar character and under similar conditions are referring the same rate in PWD Schedule of Rate have the highest frequency followed by referring the same rate in PWD Schedule of Rate plus fair adjustment so far as reasonable
Summary
Omissions, alterations and substitutions in terms of quality, quantity and schedule of works. The term ‘Variation’ usually means a change, modification, alteration, revision or amendment to the original intent of the contract and/or its works [1, 2]. In almost all construction projects, changes or variations are common occurrences during the design and construction phases. Major problems facing by construction project are issue of variation orders during the construction phase. A fair valuation or fair allowance/ adjustment on contract rate/price, usually encompasses consideration based on cost plus or market rate basis together with the circumstances the variation work was subjected to. The research focuses on the valuing a variation orders practice by client construction projects which would be helpful for building professionals in assessing and taking proactive measures for reducing the adverse of variations
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