Minimising Variations in Lump Sum Contracts

Abstract

Construction industry is large, complex and uncertain in nature. Thus, variations have become an inevitable situation in construction projects irrespective of the type, size and complexity. This research therefore focuses on lump sum projects which account for a significant amount of variations in Sri Lanka. The research aimed at investigating the nature of variations in lump sum projects, significant effects of variations and the means of minimizing variations. Semi-structured interviews and questionnaire survey were carried out to investigate the research phenomena. The professionals who involved in variation handling of lump sum projects were taken for collecting data. The results through questionnaires were analyzed using RII and interviewee outcome were analyzed using content analysis. It was found that there are a number of factors contributing to variations in lump sum contracts. The variations occur very often during the design stage of projects. The research findings revealed that delay in completion of project, increase in project cost, rework and demolition, quality standards enhancement and delay in payments are the most significant effects of variation. The research emphasized that identification of client’s requirements is essential to minimize variations within the project. The research recommended freezing design, preparation of detailed project brief, conducting comprehensive site investigations, involving owner at planning and design stage and reducing contingency sum could minimize the occurrence of variations. Further, the current study enables the professionals to assess and take proactive measures to mitigate the adverse impacts of variations through the identified controls for variations.