Issues in submission and certification of variations

Abstract

The valuation of variation is a critical aspect in the post contract stage. The Contractor has to carry out the works according to issued variation order or on the instructions given by the Engineer even without having the approval. The Contractor might be paid a percentage on the submitted price until cost proposal is certified by the Engineer. The submission and certification process is delayed on most of the projects and this will lead the Contractor to suffer losses from the project. The researcher attempted to review the time gap between variation submission and certification, using a documentary survey of completed building projects. Content analysis of the documents exposed delay in certification period of several variations, those had generated payment delay to Contractor, and identified the loss of opportunity cost as the ultimate effect. Further, the author identified the issues which caused delays in submission and certification of cost variations, and probable solutions to mitigate those issues. In order to achieve above facts, interview survey was carried out with professionals, who had experience in variation management of building construction field. The issues of delay in variation submission and certification procedure in Sri Lankan industry, and solutions for those issues were derived via analysis of the content of conducted interviews. Finally “Variation Procedure Guideline” was proposed and validated with the participation of experts. Author recommended that a proper variation procedure is required to control and certify the value of variation according to the proposed guideline to manage the situation without conflicts. Further, maintain the positive relationship between project stakeholders and contribution of government as the regulatory body will be essential to overcome from mentioned issues.