CHAPTER 1

INTRODUCTION

1.1 OVERVIEW OF THE TITLE

Construction is a very high risk industry that acts as a catalyst to

Malaysian’s GDP. It comprises a wide range of activities that involves

construction, alteration and repair. According to Memon et al. (2014), the GDP

growth of the construction sector has recorded a growth of 22.2% in the second

quarter of 2012, contributed mainly by the civil engineering sub-sector. This

pick-up in the civil engineering works was due to substantial progress in

infrastructure, utility and oil and gas projects, making construction industry as

one of the key industries in Malaysia. Such projects are like Seremban Gemas

Double Track, the Second Penang Bridge and Melaka Regasification Terminal.

However, the industry is facing many problems in its projects. N. Mohammad et

al. (2010) mentioned that one of the many major problems faced by construction

projects is the issue of variation order, occurring during the construction phase.

There are many definition and interpretation of variation in term of

construction industry. Variation in construction according to Dickson et al. (2015)

is a combination of any or all of the following: addition, omission or substitution

of any work; the alteration of the kind or standard of materials or goods; the

1
removal from site of work, materials or goods that were formerly in accordance

with the contract, but which now have been changed and change in the

circumstances in which the work is carried out such as; access and use of site;

limitation of working space; limitation of working hours and changes made to the

sequencing of work. Variation also means any addition, deletion, or any other

revision to project goals and scope of work, whether they increase or decrease

the project schedule or cost (Ibbs et al., 2001).

Variation orders are the changes that are inevitable in any construction

project (Shahin et al., 2016) and it will affect the project performance itself. It

becomes more impossible to avoid for the project which are larger in size and

having multiple scopes of works to be carried out. When a variation order is

created, it gives several negative effects to both the client and the contractor. As

revealed by Al-Hadhrami (2011), such changes or variations may have

significant implications on cost, time and quality of construction. Not only that, it

also affects health, safety and professional relations (Halwatura & Ranasinghe,

2013). According to Ayodele (2011), variation is one of the major causes of

abandonment of building and civil engineering projects in Nigeria. However,

even though there are many attempts and strategies have been done at the pre

contract stage, for instance by doing a modern planning, using overall checklist

and other solutions, the variations in construction projects are still not easy to

eliminate (Nazir, 2014).

Despite all those negative implication that variation order may bring to

construction projects, variation order can sometime be a solution to problems or

any disruptions associated in the construction site, to fulfill the demand, current

2
policies and laws, improving as well as other related causes that required by the

client (Nazir, 2014).

According to Zamri Abdul Rahman (2010), beneficial variations are those

that actually aid in improving quality, reducing cost, schedule or degree of

difficulty in the projects. Meanwhile, detrimental variations are those that reduce

owner value or have a negative influence on a project. So, project team should

be able to take advantage of beneficial variations every time when opportunity

arises. Variations can be minimized when the problem is studied collectively at

the earliest stage possible, since the problem can be identified and beneficial

variations can be made (CII, 1994).

3
1.2 AIM

This dissertation is to identify stakeholders’ perspective regarding variation order

for civil engineering works and to provide understanding of what are the causes

of variation order and its effects on overall project performance.

1.3 OBJECTIVES

To achieve the aim and as a guide for this research, the specific objectives are

highlighted and presented as below:

I. To identify the perspective of stakeholders regarding variation order for

civil engineering works.

II. To investigate the causes of variation orders.

III. To determine the effects of variation orders on the overall project

performance.

1.4 PROBLEM STATEMENT

Variation and conflicts in a construction project are two of the most

common thing to happen in these days (Enshassi et al., 2010). It is known as

one of the major setbacks for construction projects, and that includes for civil

engineering projects. There are many factors that contribute to the changes and

the effects of such are also varied depending on its causes. A study by

Halwatura and Ranasinghe (2013) identified that poor estimation is the main

cause of variation order in road construction projects in Sri Lanka.

4
 Variations and changes are expected in any construction projects.

According to a research made by Dickson et al. (2015), cost overruns,

contractual disputes and claims, and time overruns were found to be the top

three most important impacts of variation orders in civil construction projects in

Kenya. Sharifah Suzanna (2009) also found that variation orders issued during

various phases of construction projects had negatively affected both the

completion time and project costs.

When a variation order is created, it does not only bring several effects to

both contractor and client, but also to other construction project’s stakeholders.

They are the project’s stakeholders such as architects, quantity surveyors and

engineers. As before or previous researches only focus on the clients

perspective. Therefore, this study is conducted to identify the perspective of

stakeholders about variation order specifically for civil engineering works, the

causes of variation order and its effects on overall project performance.

1.5 SCOPE OF STUDY

The study was confined itself within the following scopes;

I. It is only focusing on the variation order for civil engineering works from

stakeholders’ perspectives,

II. The respondents involved were only the architects, quantity surveyors,

contractors and engineers from Jabatan Kerja Raya (JKR) Melaka.

III. The suggestion made in this dissertation only focused on strategies

adopted to overcome variation orders in contract documents.

5
1.6 RESEARCH METHOLOGY

The methodology is necessary to assist the compilation of data and information

from various sources. It involved three main stages starting from collecting the

data, analysis the data, conclusion and recommendation related to the topic.

The method can be divided into three different phases.

i. Phase One

Method used in conducting this research starting with literature

review. Literature review is a preliminary information, gathering to

form a base of this research. The source of data obtained is from the

reading material such as article, journal, web site, conference reports

and international and local construction related journals.

ii. Phase Two

On this phase, it consists of preparing and collecting the data through

case study and questionnaire survey. Generally, the data is collected

from the professional parties who are involved directly in construction

process which are Architect, Engineer, Quantity Surveyor and

Contractor. Analysis of data is done through the case study of

construction project which may experience variations and secondary

data is generated from the questionnaire survey.

iii. Phase Three

Conclusion and recommendation with reference to the objective will

be defined in this phase. Besides, analysis from the case study and

questionnaire survey also will discuss together in this phase.

6
 The process of research methodology can be summarized as Figure 1.1 below.

LITERATURE REVIEW
Gather information from article, journal, web site,
PHASE 1 conference reports and journals

DATA COLLECTION
From Case study and Questionnaire survey
PHASE 2

FINDINGS
CONCLUSION AND RECOMMENDATION
PHASE 3

Figure 1.1: Research Methodology Flowchart

1.7 TENTATIVE CHAPTER HEADINGS

Chapter 1: Introduction

This chapter is an overview of the dissertation. It includes the aim, objectives,

scope of study, issues or problems statements and methodology that had been

adopted in the preparation of this dissertation. The introduction clearly

distinguished the need and objective of this dissertation. It reveals clearly the

7
scope of study and the methodology that been used for collecting the relevant

used data in this dissertation.

Chapter 2: Literature Review

Chapter 2 discusses some basic terminologies and provides a general

understanding of variation, which will be useful to enhance the understanding

when reading the subsequent chapters.

Chapter 3: Research Methodology

This chapter explains how author carried out the research from the beginning

until the analysis. This chapter also acts as the guideline in achieving the

objectives and the scope of the study.

Chapter 4: Analysis and Findings

In this chapter. There are the findings gained from the research which are

carried out in early stage from a set of questionnaire which will be distributed to

the selected randomly Architects, Quantity Surveyors, Contractors and

Engineers from Jabatan Kerja Raya (JKR) Melaka.

8
Chapter 5: Conclusion and Recommendation

The last chapter will describe the conclusion the covered the whole research

that had been done. It also stated the best recommendation for the future used

or continued and expands the scope of this research.

CHAPTER 2

VARIATION ORDER

9
2.1 INTRODUCTION

This chapter will review on the variations order in construction project. It

reviews mainly on the overview of the variation in construction industry,

definition of variation order, types and classification of variation order, general

process and parties involve in variation order procedure and the general

overview on civil engineering works. Next, this chapter will review on the

sources of variation order and the problems encountered when managing

variation orders. Other than that, the effects of variation order, the proactive

measures to reduce variation order and last but not least the contractual

provisions relative to variation order will also be reviewed in this chapter.

2.2 INTRODUCTION TO VARIATION ORDER

2.2.1 Definition

There are many interpretation and definition of variation in terms

construction industry. According to Halwatura and Ranasinghe (2013),

‘variation’ in construction is any deviation from an agreed well-defined

schedule and scope. Stated differently, this is a change in any

modification to the contractual guidance provided by the client or client’s

representative to the contractor. This also includes all the changes to

plans, specifications or any other contract documents. This definition is

similar with Nurul Shuhada (2017) which defines variation as the change,

alteration or addition that are subject to the original, specifications or

10
other contract documents, as well as a change in cost, which is based on

the creation of legal relationship between the client and contractor.

Variation order means the alteration, change or modification of

design, quality or quantity of work omission, addition or substitution of

work. It is also including the alteration of the kind or standard of any

materials or goods to be used in the work, and the removal of any work,

materials or goods that are from site which are not accordance in the

contract. (Uyun, 2007). On the other hand, Oloo et al. (2014) describes

variation order as written instruction issued by the owner to the

contractor after execution of the contract, which authorize a change in

the work or an adjustment in the contract sum or even the contract time.

It is the formal document that is used to modify the original contractual

agreement and becomes part of project’s documents (Arain & Pheng,

2005)

As cited by Oyewobi et al. (2016), change can be defined as any

event or occurrence that may result in a modification to the original

scope, execution time or cost of work while Memon et al. (2014) define

that variation order is the deviation experienced in any project from base

contract or work scope mutually agreed at contracting time. They also

added that it is a written agreement between the contracting parties that

represent an addition, deletion, or revision to the contract documents,

identifies the change in price and time and describes the nature of the

work involved.

11
 Variation, according to Oladapo (2007), is any change to the

basis on which the contract was signed. Variation involves not only

changes to the work or matters relating to the work in accordance with

the conditions of the contract but also changes to the working conditions

themselves. Variations are only the changes made within a contract but

not changes of the contract.

In addition, ‘variation’ is the term used in building construction

industry to denote changes to be made to the contract works. Any work,

subsequently authorized and which is not expressly or impliedly included

in the original contract is termed a variation or work change (Xavier,

1994). It may be issued at any time before the practical completion date.

In a much simpler words, a variation order includes all the

changes made to the contract works, additions, deductions or omissions

and the extra works. It is including the changes to the method of work,

hours of working and type of materials which are to be used in

construction. As revealed by Jawad et al. (2009), variation order is the

formal document that alerts some conditions of the contract documents.

The word ‘formal’ implies legal binding as such all variations should be in

written and verbal variations should be avoided. Howsoever, there is no

mandatory form, clients usually have their own forms and procedures

that they are obliged to obey for a variation process.

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2.2.2 Classification of Variation Order

The nature of variation orders can be classified as beneficial

variation order and detrimental variation order. According to

Ndihokubwayo and Haupt (2008), beneficial variation order is one issued

to improve the quality standard, reduce cost, schedule, or degree of

difficulty in a project. This type of variation order is initiated for value

analyses purposes to attain a balance between the cost, functionality

and durability aspects of the project to the client’s satisfaction by

eliminating unnecessary cost from the project (Enshassi et al., 2010). By

having beneficial variation order in the project, it will optimize the client’s

value for money against the resource input by eliminating unwarranted

costs. Beneficial changes do not only give a fast and proactive effect, but

they also enable to give the platform and environment for managers to

find further beneficial change.

However, it should be noted that regardless of how beneficial a

variation order might be, non-value-adding costs are likely to accrue

(Oyewobi et al., 2016). Mohammad et al. (2010) defines detrimental

variation order as the one that negatively impacts the client's value or

project performance. For instance, a client who is experiencing problems

with financial may require the substitution of quality standard from

expensive materials to substandard cheap materials. Nurul Shuhada

(2017) also explained that, detrimental variation orders always give

negative effect to the uncertainties and complexity of project interfaces

which are common in construction and always give effect to the

occurrence of non-value-adding activities for example rework.

13
 Mohammad et al. (2010) mentioned that changes in a

construction project can be classified based on the cause that forced

them. Burati et al. (1992) added that changes in constructions are

majorly caused by design, construction, fabrication, transportation or

operability. Design changes, were found to contribute 52.5% of total

changes, fall mainly into three categories:

i. Design changes caused by improvement through design

process (DCI). For examples, changes resulting from

design reviews, technological advances or constructability

reviews.

ii. Design changes originated by Owner (DCO). For

example, scope changes.

iii. Design changes initiated by Engineer or Consultant

familiar with the process (DCP). For examples, additions

of pumps, valve or instrumentation that affect the

operation of the facility.

Sim (2007) explained that the most popular categorization

preferred by most practitioners is to classify the variations according to

the nature of the change itself. It is mentioned that changes or variations

can be distinguish according to three different criteria. The criteria are

the identity of initiator; the nature of variation; and the consequences or

the effects of variation.

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i. Identity of initiator

Changes are made by one or more principal parties, such

as employer, contractor, contract administrator and

nominated supplier. Employer is the person who is on

behalf of the users or future occupants, while contractor

can change on his own volition or behalf of sub-

contractors, suppliers, etc. Nominated sub-contractors or

suppliers, they are in relation to their respective sub-

contract; and contract administrator, on his volition, on

behalf of the employer, the designers, statutory bodies,

third parties and etc. It is a fact that most variations are

initiated by the employer. The main reason for employer to

issue variations is mostly due to the changes in the

employer’s requirements post contract award. For

example, owing to a rethinking of the needs, change in

the nature and use of the anticipated or future utilization

of the finished works. In addition, changes are made

because the review or reassessment of the design by

designers that are sometimes can be due to issues like

buildability, safety and also correction of deficiency or

errors. Contract administrator with the power is then

implemented the provision of the contract unless

employer has retained such powers under the contract.

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ii. Nature of variation

Nature of variation means the changes according to the

nature of the work itself. Besides changes to the work or

matters appertaining to work accordance with the

provisions of the contract, it also includes changes in

contract condition. This is including the addition or

omission of work, or the combination of both.

iii. Effects/Consequences of Variation

Variation can also be classified according to its effects or

consequences of the change undertaken. It can be

labeled by financial consideration or time implication. It

does not consider the nature of variation and initiator. As

an example, the adjustment in Contract Sum while time

implication is the flowing from a particular change being

undertaken. It can be concluded that variations may arise

in construction contract in numerous ways. It usually will

arise more often during the progress of work and seldom

before the commencement of work. Once practical

completion has been certified, variation will not be allowed

at any cost.

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 Besides that, Sim (2007) also mentioned that there are three

main types of variation and these can be summarized as follows:

i. Additions

Besides Additional Variation, Additions are also called as

‘Extra Work’. It is an instant type of variation that involves

an increase in the: (i) Quantity of works; and/or; (ii) Quality

of works; and/or; (iii) Scope of works; and/or; (iv) Nature

of works.

ii. Omissions

Generally, an ‘omission’ involves a decrease in: (i)

Quantity of works; and/or; (ii) Quality of works; and/or; (iii)

Scope of works; and/or; (iv) Nature of works.

iii. Hybrid

In most cases, there is a combination of the two, ‘addition

and omission’ or ‘omission and addition’; thereby giving

rise to the so-called ‘hybrid’ variations or changes.

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2.2.3 General Process and Parties Involve in Variation Order

Variation is generally inevitable and it occurs to all type of

projects (Muhammad et al., 2015). Such changes can either occur at

design or construction stages. Many other researchers also have

confirmed this and thus, it is almost impossible for a project to proceed

from beginning to the completion stage without having some changes

even at level of planning or construction phase (Ssegawa et al., 2002).

According to Neupane (2017), Variation Order is like an art with

high degree of precision. Every Variation order is different to its

predecessor. Consequently, different strategies and round of

negotiations may be compulsory to come up with solutions. However, in

generalization the following approach explained by Neupane (2017) may

be appropriate for the engineer to come up with practical solution:

i. Need identification and Authorization

Even though variation order may be needed during

normal contractual operation, but without proper

estimating, scoping and getting necessary authorization

18
 from the funding sources (Client), the contractual

operation shall never be initiated. The Client may have

opposing opinion to the particular problem or he may want

to carry using the alternative way, hence the good

communication between the Client and the Engineer is a

must in order to initiate any Variation orders.

ii. Variation Order Requests

As soon as after the Client has provided the required

authorization to carry particular variation order, it is now

the responsibility of the Engineer to ask the Contractor for

the proposal from to carry out the Variation Order, in the

specific format. The preliminary assessment from

Engineer, with the basis can also be provided to the

Contractor for its needful assessment to the problem.

iii. Quotation from the Contractor

Right when the Contractor receives the request from the

Engineer, the Contractor needs to assess the Variation

Order and provide his formal opinion to the Engineer.

iv. Assessment of the Contractor’s proposal

19
v. Application to the Employer

The Engineer shall then request for approval of the

Variation Order to the Client after the necessary

assessment of the application and negotiation to the

practically possible condition. In the meantime, the

Engineer shall provide enough facilitation needed by the

Client to assess and approve the particular variation

order.

vi. Approval from the Employer

vii. Provide the Formal Variation order

As previously mentioned, the procedure or process for

Variation Order seems to be a lengthy process. Therefore,

careful documentation of the pertaining documents,

careful understanding on the contractual protocols and

process are very vital to asses each particular cases.

Moreover, the Contract Manager shall give due attention

to provide his experience, knowledge and training bases

to his engineers particularly in Management of Contracts,

20
 Negotiation, Facilitation, contemporary record keeping

and coordination skills.

2.2.4 General overview on civil engineering works.

Civil engineering construction is a type of construction that falls

within the category of civil engineering, which is concerned with the

design, construction and maintenance of the physical and natural

environment. Civil engineering construction is the construction of

bridges, dams, roads, airports, canals, buildings and various other

facilities that affect the life of human beings. It is closely linked to the

private and public sectors, including individual homeowners and

international enterprises (Bright Hub Engineering, n.d.). Structural

engineering is one of the main aspects of civil construction. It helps to

design the structure in such a way that it can effectively support itself

along with resisting loads. The stability of the design will act as the

foundation for civil construction. In today's society there are massive

ventures meant for civil building and engineering. The technology used in

our daily lives has all been designed on the basis of civil design and

engineering. Roads, railways, stadiums, harbors, schools and other

facilities constructed all are a contribution of civil engineering.

Civil engineering construction is much more than erecting

skyscrapers or bridges. The civil engineers are trained in the interactions

among structures, the earth and water, with applications ranging from

highways to dams and water reservoirs. Since constructing a large

21
building or public-works project may require extensive planning, civil

engineers can be excellent project managers. They sometimes oversee

thousands of workers and develop advanced computerization and

planning policies. These are the common role of civil engineers:

i. Measure and map the earth’s surface.

ii. Design and supervise the construction of bridges, tunnels,

large buildings, dams, and coastal structures.

iii. Plan, layout, construct, and maintain railroads, highways, and

airports.
iv. Devise systems for the control and efficient flow of traffic.
v. Plan and build river navigation and flood control projects.
vi. Provide plants and systems for water supply and sewage and

refuse disposal.

Classifying large projects into civil construction stages has

always been anticipated regardless of whether it is for independent or

conjunction construction. Every stage of the process is taken as

individual contracts to accelerate the development of civil construction.

All of the contracts are continued in special schedules and patterns. In

order to sustain the quality of work in the construction process, the

duration of every stage should be analyzed and evaluated before the

process starts (Understand Building Construction, n.d.). Each of every

stage of construction should have a phase of implementation of its own.

Civil engineering is a diverse science that includes numerous

sub-disciplines that are intimately associated with each other. These are

the various sub-disciplines of civil engineering:

2.2.4.1 Structural Engineering

22
 This discipline involves the design of structures that

should be safe for users, cost-effective and functional. The

design and analysis should first define the loads acting on the

structures, the stresses generated by the loads, and then design

the structure to withstand these loads. It includes structures

made of steel, buildings, tunnels, roads and highways, dams and

bridges.

2.2.4.2 Geotechnical Engineering

Geotechnical engineering deals with soils, rocks, building

and bridge foundations, highways sewers and water systems in

the underground. In the design of foundations and

structures, technical information gained from the geological

sciences, material testing and hydraulics is applied to ensure the

safety and efficiency of construction.

2.2.4.3 Environmental Engineering

Environmental engineering is basically related to the

science of waste management of all types, cleaning of

contaminated areas, water purification, industrial ecology and

reduction of pollution. Technical data collected due to

environmental engineering aids the policy makers in making

decisions that are related to environmental issues.

23
 2.2.4.4 Water Resources Engineering

The civil engineering discipline is concerned with quantity

management and quality of water in the underground and above

ground water resources such as lakes, rivers and streams.

Geographical areas are studied to determine the amount of water

flowing into and out of a source of water. The discipline of civil

engineering covers the areas of hydrology, geology, and

environmental science.

2.3 Significant Causes of Variation Order

In every construction projects, variation order is said to be inevitable

(Arain & Pheng, 2005). Although no one can assure that variation order can be

avoided completely, their occurrence and subsequent waste can be eliminated

and minimized if their origin and causes are clearly determined (Enshassi et al,

2010). Moreover, variation order may originated in numerous of factors pertinent

to the construction projects. Some factors are foreseeable, others are not

(Mohammad et al., 2010). Various authors have identified different causes of

variation orders in construction project, both on the private and public projects.

24
 Memon et al. (2014) have listed numbers of causes of variation orders.

The causes are the change of schedule, change in scope, Client’s financial

problems, poor knowledge of available materials and equipment, conflicts

among contract documents and many others. Based on a research carried out

by Kaming et al. (1997), they also added that the major factors influencing cost

overrun for high-rise projects in Indonesia were the increase of material cost due

to inflation, inaccurate material estimating and the degree of project complexity.

While in the case of time overrun, the most important factors that caused delays

were design changes, poor labour productivity, inadequate planning, and

resource shortage.

According to Mohammad et al. (2010), variation orders may also occur

due to the errors in contract documents, extra work caused by subsurface

conditions, additional quantities of works or materials, reduction of work, or lack

of proper communication between the parties.

A study that is conducted by Arain and Pheng (2006) have identified four

origin agents of variation orders. These included “Client”, “Consultant”,

“Contractors” and “other changes” that can be referred to as force majeure.

There is an interrelation between origin agent and the causes of variation

orders.

2.3.1 Agents

2.3.1.1 Client

A Client is also called as an “Owner” or an

“Employer”. Nurul Shuhada (2017/9) described that Client

25
is made up of a heterogeneous group of individuals and

organizations. They may be an investor, owner-occupier

or a developer, public or private. Additionally, a Client can

be from the private sector, quasi-government bodies or

the government itself.

In every construction project, Client, who is the

project initiator, plays the most important role from the

inception to the completion stage of construction. As a

result, Client contributes the biggest influence to the

likelihood of the occurrence of variation orders. This

statement is supported by Alnuami et al. (2009) as they

remarked that the most important cause of variation

orders given by consultants is the changes in the

specifications and scope, initiated mostly by project

owners. Similarly, the results of the study carried out by

Ismail et al. (2012) has disclosed that change of plans or

scope by the owner was identified as the greatest cause

of variation orders from all the viewpoints.

The Client has the ultimate power to decide the

needs and the objectives of the project. He or she also

establishes the scope of works and the required quality

standards. During construction phase, Clients initiate

variation orders due to various of reasons. Referring to

Oloo et al. (2014/10) some of the popular reasons that

lead to variation orders by Clients are:

26
 i. Change of scope

ii. Change of project schedule

iii. Owner's financial problems

iv. Inadequate project objectives

v. Replacement of materials

vi. Change in specifications

Furthermore, according to Donold (2014), there

are two types of Clients exist. One is the Clients who have

the knowledge and experience in construction industry

and the other is the Clients who have no or little

knowledge and experience about this industry. Clients

with experience in construction will normally involve

during the design stage by providing professional

guidance to the design team. This participation may

contribute to the avoidance of contiguous changes during

construction stage. For instance, public entity clients and

private development companies both have their own

professional team.

In contrast, clients who have no knowledge or

experience in the construction industry will tend to just

follow the guidance of the designers without any clear

ideas of what it is. As stated by Uyun (2007), it is very

27
 difficult to determine the exact requirements of the client.

The client that has zero knowledge and experience

usually leads to some major variation order as they will

change their mind of what they want throughout the

construction project. The changes will give a

consequence in the quality standard degradation and high

maintenance cost.

2.3.1.2 Consultant

Generally, consultant team normally consists of an

architect, designers, specialist engineers, project

managers, and cost consultants. In several cases, the

consultant directly initiates variations or the variations are

required because the consultant fails to fulfil certain

requirements for carrying out the project. The changes

caused by consultant are as follows (Sunday, 2010):

i. Change in design

ii. Errors and omissions in design

iii. Conflicts between contract documents

iv. Inadequate scope of work for contractor

v. Design complexity

vi. Inadequate shop drawing details

28
 vii. Lack of consultant's knowledge of available

materials and equipment

However, referring to Donold (2014), there are

many most important factors that can cause variations to

happen and among them are due to change in design by

consultant, lack of consultant's knowledge of available

materials and the uses of inadequate specifications for

local markets by international consultant. Jawad et al.

(2009) also reported that the change in specifications by

the consultant is the main factor causing variations in

educational building projects. Changes in specification

results in variations to the project, leading to delay and

increased overall cost. (Memon et al., 2014)

As cited by Marzouk and El-Rasas (2014),

avoiding delay in respond to contractor’s queries as well

as the approval of the submitted submittals and shop

drawings can help to avoid the occurrence of variations

due to consultant default. Therefore, it is a need to the

establishment of a control system to handle, control, and

evaluate variation orders, initiated by the owner which is

managed by the consultant’s behalf.

If the consultant fails to interpret all the needs

requirements of the client, it will result in the different in

design from the perceived one and this will eventually

29
 lead to variation orders; issued to ensure compliance with

the client's requirements. Donold (2014) states that it is

intolerable to have the knowledge of all new materials and

products that is entering the construction market. This

shows that the consultant may be unaware of the

affordable alternatives and when the full information about

the materials is available, a variation order will be issued

so as to change and give the project a better construction

method. A change in technology may influence the

consultant to initiate a variation order.

2.3.1.3 Contractor

There are several situations that contribute to

Contractor’s default. For example, defective

workmanship, unfamiliarity with local conditions, poor

management and lack of efficient communication (Jawad,

et al., 2009). Additionally, according to some findings by

Mohammad et al. (2010), there are also many other

causes that affect to variation, caused by the default of

Contractor and they are:

i. Lack of modern equipment

ii. Lack of contractor’s involvement in design

iii. Shortage of skilled manpower

iv. Contractor’s financial difficulties

30
v. Defective workmanship

In normal practice for every construction project,

Contractor is responsible to advise Consultant to issue a

variation order whenever a technical problem is

discovered (Asamaoh & Offei-Nyako, 2013). All

construction players involved in a contract should be

aware that all the information given by Consultant are not

necessarily always right. A contractor is advisable to

propose his own alternative construction methods where

his knowledge in the field will work better and fit the

desired fitness than the method proposed by the Client or

Consultant. Contractors also may request for Consultant’s

remedial solution regarding any problems that are likely to

arise especially when Contractors may discover

discrepancy, omission, errors and conflict between the

documents. Variation order will then be issued along with

additional cost to solve the problem.

According to Asamaoh and Offei-Nyako (2013), a

contractor who finds it complicated to interpret ambiguous

designs and inadequate working drawing should notify the

Consultants as soon as possible. Delays in issuing

variation order by Contractor may result in losses in terms

of idle labour and plant time while waiting for the

31
 Consultant’s decision. All has to be done relatively quickly

without having any negative effects on the overall

project’s productivity.

2.3.1.4 Other Factors of Variation Orders

Besides client-related variations, consultant-

related variation and contractor-related variations, there

are any other factors that contribute to the variation to

happen and that is the situations beyond the control of

parties of the contract. Such situations are the weather

conditions, certain health and safety considerations,

change in government regulations, change in economic

conditions, socio-cultural factors and also the unforeseen

problems (Arain & Pheng, 2006).

According to a research conducted by Mohammad

et al. (2010), it was identified that weather condition was

ranked the lowest by the respondents in which 93% of the

respondent has ranked it as a non-significant factor. This

may be due to the moderate weather in Malaysia thus the

factor has no great effect in construction projects.

32
2.3.2 Problems Encountered When Managing Variation Orders

Oladapo (2007) defined variation order as a written instruction by

the architect requiring the contractor to alter the works in any of these

situations. Variations have become one of the most prevalent

phenomenon in the construction world as they are almost unavoidable

and so predominant that it is rarely possible to have a project completed

without having changes to either its original plans or the construction

process itself (Oladapo, 2007).

Based on the reviews from the study of the other researchers,

there are many problems encountered by projects stakeholders in

administering variation orders in construction project. According to

Halwatura and Ranasinghe (2013), variation orders can be time

consuming and costly to a project. This is because the Contractor tends

to charge the Client with higher rates for the variation items. This will

then affect the Client in terms of cost as he is subjected to pay the

Contractor for the variations that he made.

According to Chan and Yeong (1995), variation orders oftentimes

involve additional cost and disruption to work already underway, leading

to cost and time overruns, quality degradation, and loss in productivity on

construction projects. That is why there is a high chance that there might

be disputes between the Client and the Contractor regarding time and

cost.

Previous study such as Ndihokubwayo (2009) examined that

based on a survey from 30 companies operating in Western Cape

33
metropolitan, the problems encountered when negotiating variation

orders are cost determination, time determination, reluctant nature of the

client, lengthy approval process, difficulties to satisfy the contractor, lack

of coherent practice process, impediment in decision making, length of

period payment, accountability in covering cost, weather and disputes.

His respondents reported that they mostly encountered problems

associated with the determination of the costs involved (32%).

In a study conducted by Nurul Shuhada (2017), she focused

more on the problems faced by only the Contractors in managing

variation order. She has classified the problems into seven categories

that have been identified and three main reasons among them are the

quality, time and cost.

2.3.2.1 Quality

Quality is the conformance to client’s

requirements. It is the responsible of the site management

team to work together with their subcontractors to plan all

the necessary work that needs to be carried out for

variation orders. However, contractors and subcontractors

seem to ignore about the quality assurance due to the

perceived increase in other additional work that is

required. To support that, it was also identified that lack of

providing quality workmanship is one of the constraints on

indigenous contractors’ performance in Nigeria

(Muhammad et al., 2015).

34
 Therefore, this shows that the existence of

variation order can bring to the degradation of quality for a

construction project, if they are not controlled properly.

Thus, it becomes one of the challenges for contractor

since the project might not achieve the satisfaction of the

client in terms of quality.

2.3.2.2 Time

Variation orders are able to affect to the overall

work delay for the contractors if the variations made are

severe and involved in multiple scope of works. This is

because there is now new work load added to the workers

every time when variation order arises. More time is

required to spend for the varied works and it becomes

much longer when the works are difficult and need of high

skills. For example, there is a need of usage of new

equipment in variation order’s work so it will take longer

time to purchase, especially when the equipment required

for that variation work needs of shipping from other

countries.

Hence, it is proven that variation order can give

problems to contractors in terms of time which is affecting

to project delay. This is simply because contractors will be

35
 distracted in managing the changes in his work schedule

resulting from the variations occurred.

2.3.2.3 Cost

There can be a lot of problems faced by the

contractors during managing variation orders. One of

them is affecting the construction cost. For example,

some variations require some additional labour and every

labour hired comes with a lot of other costs to be paid by

contractors. Not to concern only on the labour’s salary,

but contractors have to pay for other costs of employment

too, such as paid holidays, medical leave, insurance,

maintenance when staying away from home, travel costs

and any extra work duties’ payments.

Besides that is when the variation work requires

additional or substitution of materials. This is because,

other than contractors have to pay for cost of materials as

the amount paid to the supplier, they also have to

consider about the wastage and whether further works

have been carried out following receipt and prior to

incorporation into the works. As an example, taking supply

and transportation either within the jobsite or from one

location to another.

36
 Not enough with that, contractors have to consider

for the costs of plants and equipment if the variation order

works require some additional plants and equipment as

not per stated in the construction contract originally. Cost

of plant and equipment differs depending on whether they

are either owned or hired. If contractors already owned

their own plant and equipment, things that they have to

consider are the purchase price and depreciation,

maintenance, servicing and replacement parts, tax,

storage and transportation, insurance, fuel and

consumables. Different if it is a hired-in plant, contractors

only have to bear for the cost of hirer, cost to be paid to

the supplier, costs of the operator and fuel and also the

costs for normal wear and tear.

Thus, in terms of cost, the contractors are facing

the problem when managing variation orders as they have

to deal with increase cost of employment, increase cost of

additional or substitution of materials and increase cost of

plants and equipment.

(Nurul Shuhada, 2017)

37
2.4 Effects of Variation Order

Given a well-structured schedule of works, project performance would

achieve to its maximum if the work invariably flows smoothly within time limits

and allocated budget (Ndihokubwayo & Haupt, 2008). However, it is so

uncommon that projects can perform precisely to their original schedule due to

various reasons including for example changes of specifications by the Client,

changes of market condition or corrections to drawing design by the consultants.

Variability generally impedes project performance (Thomas et al., 2002).

Oyewobi et al. (2015) contended that effective project performance and delivery

can only be achieved when factors which have potentially negative effects on

project performance as a result of variation orders are identified, reduced or

possibly eliminated. There are obvious evidences from various literatures that

variations contribute to a lot of effects to overall project performance. Usually, it

gives bad effects towards the construction project.

2.4.1 Cost Overruns

The most common effect of variation order to a construction

project during construction phase is the increase in project cost. Any

major additions, alterations or substitution in the design may eventually

increase in the project cost (Arain & Pheng, 2005). Many of authors have

also agreed that variation orders issued during various phases of

construction project can negatively affected the costs of project.

According to a case study in the State of Selangor, Malaysia to

examine on the causes and effects of variation orders in the construction

38
of terrace housing projects, Mohammad et al. (2017) have identified that

the changes of work have caused the project cost to increase by 14%

from the original cost. Charoenngam et al. (2003) have reported that his

research have shown that average cost escalation was 7% of the original

project cost with an average time extension of 30% than the originally

stipulated project duration. Similarly, Awad (2001) analyzed the variation

orders of twelve combined sewer overflow projects and identified that

variation orders caused the cost escalation of 7% from the original

project cost.

Arain and Pheng (2005) studied about the potential effects of

variation orders on institutional building projects in Singapore, and their

findings suggested that the most frequent effects of variations were

increase in project costs, increase in payments to contractor, delay in

project completion schedule, increase in overhead expenses and rework

and demolition. Oladapo (2007) also stated that projects in Nigeria are

known to be affected by variation orders with consequential effects on

project cost. Memon et al. (2014) mentioned that any alteration or

addition in the design during execution of the project may result in

demolition or rework of any project component and eventually increases

the project cost.

A study on analysis of causes and impact of variation order on

educational building projects by Oyewobi et al. (2016) stated that the

construction cost exhibits the most significant impact with the severity

and frequency indices of 82 and 8.86 per cent, respectively.

Ndihokubwayo and Haupt (2008) added that the more the variation

39
orders, the more they will impact on the overall construction delivery

cost. Their study concluded that variation order can give some cost

implications to a project and those implications can be classified into two;

direct and indirect cost implications.

2.4.1.1 Direct cost

Direct costs constitute the additional costs

acquired to perform the activities of the current variation

orders and this includes: i) resources used including labor,

material, and plant to carry out the actual variation orders;

ii) increase in overheads-related charges and professional

fees; iii) cost of resources that were used to carry out the

aborted or substituted works; iv) cost of demolition of

aborted or substituted works; and v) cost for resources

lying idle before the ordered task restarts.

2.4.1.2 Indirect cost

Indirect costs are those incurred as a result of

occurrence of variation orders and include: i) change in

cash flow; ii) loss of productivity; iii) cost for redesign and

administration of variation order; iv) litigation-related costs

in case disputes arise due to variation orders.

40
2.4.2 Time overruns

Several authors agree that variation orders present as one of the

reasons for project time overruns. For example, a study of delays and

cost increases in the construction of private residential projects in Kuwait

by Koushki et al. (2005) revealed that a number of variation orders

issued during the construction phase led to project delays. This

assertion was supported by Mohammad et al. (2007) who studied on the

causes and effects of variation orders in the construction of terrace

housing projects contended that the leading effect of the changes is the

delay in the completion of the housing project. This extended period of

time resulting in an increase of 63% from the original time.

Memon et al. (2014) mentioned that a previous research on the

delay problems in construction projects of Hong Kong summarized 50%

of the projects surveyed were delayed because of variations. In reducing

the delay of a project, the contractor would try to accommodate the

variations by utilizing the free floats in the construction schedules. A

research by Choudhury and Sanampudi (2008) also have proved that

higher number of change orders results in a longer duration of

construction.

Previous study by Dickson et al. (2015) examined the causes and

effects of variations in civil engineering construction projects in Kenya

41
 and it was identified that time overruns was the third most important

effect of variation orders. Asamaoh & Offei-Nyako (2013) also reported

that 80 percent of professionals in Ghana have listed cost overrun as

one of the main effects of variation order.

One of the popular causes of variation orders are changes in

design due to insufficient time during design process. Consequently, the

consultants need to address these issues by changing the design during

construction phase. This will adversely affect the project and may cause

delay in project completion (Enshassi et al., 2010)

2.4.3 Quality Degradation

Too many variations on a construction project may potentially

affect the quality of works. This is because contractors tend to

compensate for the losses from variations by cutting corners (Manzoor &

Pheng, 2006). Contracts with a significant degree of risk for unidentified

variables such for example lump sum, contractors may cut corners on

quality and quantity to maximize profits (Ndihokubwayo & Haupt, 2008).

Quality of works may be compromised because contractor may try to

compensate for the losses as they are not optimistic at about cost

recovery. According to Uyun (2007), the quality of work will be at risk if

there are variations occurred. She then added that if there are too many

changes instructed, it may affect the contractor to feel unmotivated and

fear of the possibility for changes. This will result in a poor and little

quality of work and low productivity of the contractor.

42
2.4.4 Disputes among Professionals

Disputes over variation orders and claims are inescapable. Arain

and Low (2006) stated that poor relations and disputes among

professionals are two of the most potential effects of variation orders in

construction projects. A finding from previous studies such as Alnuaimi et

al. (2010) that studied the effects of change orders on public construction

projects in Oman and found that disputes is one of the most ranked

effects of change orders.

Motawa et al. (2007) added that variations constitute a significant

cause of delay and disruption in management of construction works and

that the effects of change orders are difficult to quantify, which often lead

to disputes as generally accepted by both owners and contractors. Clear

procedures presented in contract and fair allocation of risks can benefit

in resolving the disputes problems between project professionals.

43
2.5 Proactive Measures to Reduce Variation Order from

Academic Literature

In construction, variation orders can result anytime; a Client changes the

design, the contractor uncovers hidden conditions, or errors are discovered in

the scope of work. Variation is known as a common phenomenon in all types of

construction projects (Ibbs et al., 2001), it can cause substantial adjustment to

the contract duration, total direct and indirect cost, or both. With so many

potential pitfalls, it has become so rampant that it is hardly possible to complete

a project without changes to the plans or the construction process itself. Every

problems has its own solutions. Although variations and changes are said to be

inevitable to every construction projects, they can still be controlled by

minimizing their occurrence. Based on researches carried out by several of

authors, there are several common control procedures that can be applied to

construction projects to reduce the effects of variation orders.

2.5.1 Adequate Planning

The more variation orders on a project, the greater the likelihood

that they become time consuming and costly elements in construction

projects. However this problem can be solved which is to reduce the

variation order by having an adequate planning. According to

Mohammad et al. (2010), the finding of the investigation on the causes of

variation orders in the construction of building project have concluded

44
 that the Client is the main source of the variation orders in construction

of building projects. The study suggested that Client should have

adequate planning and recourses before commencing a project in order

to avoid variation order during the construction phase. As similar to a

study by Halwatura and Ranasinghe (2013), it was also stated that the

Sri Lankan require to carry out adequate planning in advance by all

involved parties before work starts at the site in order to minimize

variation orders.

2.5.2 Appointment of Professionals

Errors and omissions in design is proven to be one of the main

causes of variation orders to construction (Mohammad et al., 2017).

According to Hanif et al. (2016), in order to cater the problem, errors and

design omissions can be minimized by hiring appropriate design

consultants involved in the execution of similar construction projects.

Employment of a permanent and well-settled team member will

contribute to successful completion of the project and create an

environment of mutual understanding among the key stakeholders of the

project.

Mohammad et al. (2017) added that the Client must appoint an

experienced project manager and technical staff who can advise

management on the processes involved in the construction before any

decision is taken. This assertion was supported by Oyewobi et al. (2016)

as their study stated that the most familiar effect of variations which is

45
 increase in project cost could be minimized through successful project

management.

Besides that, Client also needs to consider for the appointment of

qualified professionals and consultants. This is because previous

researches have proved that construction professionals may contribute

to variations too (Oloo et al., 2014). Oyewobi et al. (2016) said that

appointment of qualified and experienced contractor can help in reducing

the increase in project cost that was stem from variation order. Halwatura

and Ranasinghe (2013) reckoned that the investigation of variation order

must be carried out properly by qualified professional staff at the initial

stage, which is in the pretender period. Not only that, works should

always be supervised with an experienced and dedicated supervisor

(Asamaoh & Offei-Nyako, 2013).

2.5.3 Maintain Proper Communication

To make sure that all parties are in continuous communications is

one of the most effective ways to reduce the influence of change orders

on project delivery. One of the best ways to accomplish this is by having

regular meetings. Any issues can be addressed on a weekly basis and

managed before they turn into delays. Project management software

which enables the digital sharing of reports images, and data among

participants, may be even more successful. Research by Mohammad et

al. (2017) recommended that there must be continuous coordination and

direct communication between the project team as the client and

46
 consultants involved in the construction of which must be implemented to

reduce discrepancies in the drawings, contract documents and design

errors. According to the research findings by Halwatura and Ranasinghe

(2013), they concluded that the Sri Lankan context should pay more

attention to several factors to minimize the occurrence of variation

orders. They suggested that it is very important to maintain proper

communication networks and documentation in terms of order

management of variation. In addition, Continuous coordination and direct

communication will not only reduce design discrepancies and errors as

well as design omissions, but will also offer professional opportunities to

closely review contract documents that would help eliminate the

variations resulting from contract documents disputes (Arain and Pheng,

2005).

2.5.4 Define Clear Scope of Work

One of the easiest ways to diminish change orders is to be as

clear as possible as to what work is being done during the project and

who is doing it. Every aspect of project work should be covered for both

the contractors and subcontractors. It should also be obvious from the

Client's and contractor's point of view who are the points of contract

should issues arise. According to a study on the causes of variation

orders in construction projection the Gaza Strip by Enshassi et al.

(2010), the authors suggested that the project owner should provide a

clear scope of work as it will help in minimizing variation orders. Similarly,

47
 Oloo et al. (2014) have concluded based on their findings that in order to

reduce the occurrence of variation order in civil construction projects in

Kenya, Clients should provide a clear brief of the scope of works.

2.5.5 Feasibility Study

Feasibility studies are preliminary studies that are undertaken in

the very early stage of a construction project. It is carried out to establish

whether the project is viable and to help identify feasible options. It tells

us whether a project is worth the investment and whether the project is

doable enough to be constructed. Feasibility studies can help in

minimizing variation orders. Previous study have stated that occurrence

of variation order in civil construction projects in Kenya can be reduced

by having a conclusive feasibility study that entails thorough

geotechnical investigation that brings to the fore all subsurface

conditions necessary for design Oloo et al. (2014). Pitroda (2015) also

added that Client should carry out proper feasibility study and survey

before the design stage. Mohammad et al. (2017) in their study have

suggested for improvement that the client must provide the requirements

that are required in detail and the documents related to construction

projects to be built prior to the design stage of implementation. This way

is to avoid change in the scope of work by the Client. This can be

achieved before a project is implemented by conducting a detailed

feasibility study.

48
2.6 Contractual Provisions Relative to Variation Order

Variation orders usually happen to most projects and are very common

with large projects. The Client or the consultants for like the architect, project

manager or engineer has the authority to finalize variation orders. Upon

submission and approval of a variation order, it usually helps to alter the original

contract so that the variation order is now part of the contract. The contractual

nature of construction changes is a very famous feature in the construction

industry (Hao et al., 2008).

A good construction contract includes provisions to comply with project

adjustments. According to Nurul Shuhada (2017), to make an effortless change

to the project, the procedures to make a change set forth in the contract

between the owner and the contractor must be consistent with the variation

order process set forth in the contract between the contractor and his

subcontractors. Not only that, inconsistencies between the different contracts

can also affect unintended consequences (Hao et al., 2008). The contractor

must therefore take this matter seriously when contracting not only with the

Client but also with the subcontractors.

The importance of the variation order clause cannot be overstated. It is

the clause most often relied on by contractors and subcontractors when looking

for extra cost recovery, and also becomes one of the root of project conflicts at

49
all times. Thus Jayalath (2012) concluded that, it is important for contractors to

understand what was specified in the standard variation order clause and what it

encompasses. This section will generally focus on the main two commonly used

Contract Forms by construction contracts which are P.W.D 203A revision 1/2010

and P.A.M Contract 2006 (With Quantities). Both of these Standard Form of

Contract represent the public and private sector of construction project

respectively.

2.6.1 Based on Form of Contract P.W.D 203A Revision 1/2010

P.W.D Standard Form of Contract is the traditional contract form

based on drawings and specifications (203) or bills of quantities (203A)

produced for use in public sector or government projects. It includes

contracts for building as well as civil engineering. Nurul Shuhada (2017)

mentioned that the standard form is usually used in conjunction with the

accompanying standard administrative forms which have been produced

specifically for use with the contract forms. Furthermore, it also

enhances the obligations contained within the conditions of contract.

Based on Form of Contract P.W.D 203A, Variations is one of the

contract conditions and is clarified briefly under Clause 24.0 and Clause

25.0. In addition, the Clauses synthesize on the nature of variations and

variation orders, the process of variation orders, and how the parties

involved in the construction project manage in valuation of variation.

50
 Clause 24.1 of Form of Contract P.W.D 203A notes that if there

are any works involving a variation, S.O must issue a variation order.

This clause authorizes the S.O to issue instructions requiring a variation

to the work. (Nurul Shuhada, 2017). The variation instructed by the S.O

shall not made void to the original contract between the Government and

the Contractor. Nurul Shuhada (2017) added that the main idea of this

condition is that to ensure that the variation order made does not allow

the Contractor to treat the contract as at end. Also, the claim paid should

also comply with the term of the contract as stated in the clause 25 of the

contract. Besides, there is no condition stated in this form of contract on

the specific duration for the Contractor to carry out the Variation Order's

work upon instructed. The Contractor will be instructed to execute the

Variation Order works as soon as possible upon the issuance of the

variation by S.O.

The variation order can be issued due to the changes of the

works in the Contract Document. Clause 24.2 of the Contract Form

outlines the meanings and interpretation of the variation and this Clause

have been explained in the definition of variation. Nurul Shuhada (2017)

described that variation shall include the addition, omission, or changes

of any work, alteration of the types or standard or any of the materials or

goods to be used for the works. It must also include the removal off the

site of any work, materials or goods executed or brought to the site,

except if the work, materials or goods are not following the conditions in

the contract. She added that the S.O should advice only to omit any work

with a genuine omission (Nurul Shuhada, 2017). The works specified in

51
the contract, which are the responsibility of the Contractor, cannot be

withdrawn in the form of a purported omission or given to another

Contractor.

Besides that, the Contractor is not exempt from any variation

made under Clause 24.0 to carry out his work as outlined in Clause

22.1(c). This provision is evidently stated in the clause 24.3 of the

contract form. Clause 22.1(c) applies to the Contractor's duty and

guarantee to the Government that the design, integration, execution of

the works, materials and workmanship of the works or 20 portions of the

works are independent of faults, suitable, functional, safe and

compatible with the requirements of the Government.

All the variations instructed must be measured and valued by the

S.O on the basis of the provision specified in the contract form after the

issuance of instructions requiring variation order. For the variation order

imposed by the S.O, pursuant to clause 24.1, he has no power and no

duty to measure and value the variations carried out by the Contractor or

those instructed by the Government (Nurul Shuhada, 2017). In these

situations, the Contractor must have a guarantee on behalf of the

Government to pay or otherwise need to create a new contract.

According to Nurul Shuhada (2017), these are conditional on the parties

and the S.O as long as the contract sum is not affected. That being so, in

Clause 25.1, the valuation of variations is divided into several methods

and rules such as Bill of Quantities’ rate, fair adjustment rate, agreed rate

or day work rate, unless previously or otherwise been agreed.

52
 Based on any required regulations of variation used, after having

a specified amount, such amount need to be certified by the S.O. After

that, this amount will be decided whether to add or deduct from

the Contract Sum and will be adjusted accordingly. It also allowed the

S.O to certify such amount (Nurul Shuhada, 2017). These condition is

clearly stated in the Clause 25.3 of the P.W.D 203A Form of Contract.

2.6.2 Based on P.A.M Contract 2006 (With Quantities)

According to Zarabizan and Aminah (2013), Form of Contract

P.A.M Contract 2006 (With Quantities) is a standard form of contract for

private sector and traditional general contract. P.A.M Contract 2006 is

being used extensively in the private sector institutional, commercial,

housing and other building projects (Nurul Shuhada, 2017).

In this Form of Contract, the conditions regarding variation is

under the Clause 11.0 until the Clause 11.9. These clauses provide a

brief explanation of the roles and obligations of each party involved in the

work of the variation order before, during and after the works of the

variation order. There are definition of variation in perspective of P.A.M

2006 contract form, issuance of variation order, valuation of variations,

and the impact on the contract sum of a project.

Clause 11.1 of terms and conditions in P.A.M Contract 2006

explained about the definition of variation and these we discussed

earlier. Nurul Shuhada (2017) stated that there are a total of five broad

area of variation term in this contract form for the purposes of the

contract. The definition of variation in P.A.M Contract 2006 and in P.W.D

53
203A Contract Form, both are almost the same. Provided that, there are

additional sub-clauses distinguishing between these contracts, they are;

Clause 11.1(d), mentioned that variation shall also be taken into account

when there is any changes to the provision of the contract in the situation

of any limitation on working hours, working space, access to or utilization

of any particular part of the site and also the execution and completion of

the work in any particular order.

As stated in clause 11.2 of P.A.M Contract 2006, when variation

occurs, an architect may issue an AI ordering such variation or

sanctioning any variation made by the contractor in the construction

project. The instructed variation order will not vitiate the Client's original

contract with the Contractor. Moreover, the clause also enhances the

contractor's right not to delay the execution of the works of the variation

order. If there is any pending variation valuation the contractor must

carry out all instructed variations with due diligence and expedition

(Nurul Shuhada, 2017).

The issuance of variation must be made in writing by the

Architect. At any time for as long as it is before the issuance of Practical

Completion Certificate, the Architect may issue the instructions of

variation order that may be required. Nurul Shuhada (2017) mentioned

that the variation order still can be issued even if the Contractor is in

liable of delay and a Certificate of Non Completion have been previously

issued. She even added that any variation order issued after the

completion of the milestone shall not be contractually binding and the

Contractor shall not comply with that instruction unless there is an

54
 express clause in the contract authorizing that variation order to be

issued. If any variation is specified in AI, it needs to be necessitated by

obligation or compliance with the requirement of any Appropriate

Authority and Service Provider. All of these conditions have all been

stated clearly under the Clause 11.3 of the Contract Form.

Over and above that, there are also clauses spell out in P.A.M

Contract 2006 about the rules in valuation of variation. As specified in

Clause 11.5, all variations in a construction project must be measured

and calculated by the Quantity Surveyor. Because of that obligation, the

Contractor must assist the Quantity Surveyor regarding any recording of

site information and/or site measurements that are carried out at the site

(Nurul Shuhada, 2017). However, Quantity Surveyor does not have any

expert in handling mechanical and electrical works or services. For these

cases, therefore, it is usually the engineer and/or the specialist

consultant who will undertake the works related to measuring and

valuing the specific works involved while the quantity surveyor remains

primarily responsible for the same works. Nonetheless, in dealing with

the measurement and valuation in the contract, the contractor must be

given the opportunity to be present to take such notes and

measurements as may be necessary.

2.7 Summary

Because variations in the construction industry commonly occur in any

construction project, understanding the definition, types, procedures, conditions

55
 in the contract forms, origins and consequences of variations is compulsory for

all parties involved in the construction project. The effectiveness and severity of

the variation works in construction projects often depends on how the parties

involved are able to manage them. This is also including when the parties have

to encounter many challenges and impacts of variations works in construction

project.

CHAPTER 3

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter outlines the methods of study and describes the tools and

techniques used in a systematic exercise in data collection. The methodology

explains how the entire research project is structured in a practical way. An

action plan must be developed to demonstrate how the problem will be

investigated what data will be collected using what methods and how this

information will be evaluated to reach conclusions and establish

recommendations (Walliman, 2005). Research projects synthesize and analyze

existing research theory, concepts and observations, in an attempt to answer a

specific question or to provide new insights (Fellows & Liu, 2015).

This research methodology is used as a manual to the author in order to

reach the objectives and scope of the study. This chapter will be discussing

56
 comprehensively about the research procedures involved throughout the study.

The chapter will also address the research process in depth from how the data

is collected to how it is interpreted and analyzed to achieve the study's

objectives and scope.

Once the problem statement has been formulated, it should become

clear which type of data is needed to analyze the problem and what type of

analysis is most appropriate for analyzing the data (Walliman, 2005). The

problem investigated in this study is the stakeholder perspective on the variation

order for civil engineering projects, the causes of the variation order and its

impact on the overall performance of the project.

3.2 DATA COLLECTION

Each section of the study will concentrate on the research approach to

be used to achieve the goals of the study. Therefore, every measure taken must

be appropriate and relevant to this topic of study. Fellows & Liu (1997) stated

that the methods of collecting data give an impact upon the analyses which may

be executed and subsequently, the results, conclusions, values and validity.

Throughout this study two methods were performed to collect accurate and

appropriate information. The approaches are:

3.2.1 Primary data

Primary data is the data collected from the questionnaire survey

given to the Architects, Contractor, Engineers and Quantity Surveyors

57
from Jabatan Kerja Raya (JKR) Melaka and have involved in civil

engineering projects.

Questionnaire is a set or pre-formulated and written questions

that the researcher would like to ask to the respondents and record their

answers. Questionnaire can be an effective tool for collecting data when

researchers know exactly what information is needed. Generally, two

approaches of questionnaire have been handed out, namely quantitative

and qualitative approach.

3.2.1.1 Quantitative approach

Quantitative methods focus the attention on the

measurements and amounts (more and less, larger and

smaller, often and seldom, similar and different) of the

characteristics displayed by the people and events that

the researcher studies (Thomas, 2003).

In short, quantitative approach is a systematic yet

organized questionnaire that requires the corresponding

parties to complete the questionnaire by answering one or

more answers from a list of alternatives provided by the

researcher. The statistical report can be therefore be

generated.

3.2.1.2 Qualitative approach

58
 Qualitative approach seeks to gain insights and

understanding people’s perceptions of ‘the world’. The

beliefs, understanding, views and opinions of people are

investigated (Fellows & Liu, 1997). Whereby, for the

qualitative approach, it requires the respondent to

complete a list of questions based on their experience

and viewpoint.

3.2.2 Secondary Data

The secondary data is in the form of literary sources covering

topics related to the subject. Two distinct literature studies were adopted

and they are namely preliminary and full literature study.

3.2.2.1 Preliminary literature study

A preliminary literature study provides an

understanding of the topic and the issues involved and

how the proposed work will fit in. It provides an

understanding of the research study's background and

key concepts and the basis on which the problem

statement was formulated. By doing this, it can help in

achieving the objective to understand the perspective of

59
 variation order for civil engineering works, causes and the

effects of variation order on overall project performance.

3.2.2.2 Full literature study

A full literature study is a part of the research

process itself rather than part of the preparation for

research. Such a literature review shows that a

researcher knows the area under investigation, shows

how previous research studies support the current one,

and generates new research ideas by finding out what

was left behind. The literature examined was compiled

mainly from textbooks, journals, relevant books,

magazines, articles, conference proceedings, brochures,

thesis and dissertations in order to get more information

about variation orders. These are the most reliable

sources of information and are the most referenced in

scientific reporting. Copies of these were obtained from

the Universiti Teknologi MARA libraries and electronically

from websites.

60
3.3 RESEARCH INSTRUMENT

This research utilizes on the quantitative research methodology. The

instrument used to collect data was by questionnaires. A set of questionnaire

containing several questions which are divided into numbers of sections were

being distributed. Different scales of measurement were used to give the

respondent to rate their level of agreement.

For this study, the questionnaires (Refer to Appendix A) were designed

and constructed. They are divided into 4 (four) different sections:

3.3.1 Section A: General Information of the Respondent

The purpose of this section is to obtain information about the

respondents, the organization the respondent serves in, his position in

the organization, his work experience and also what kind of projects the

respondents involved.

3.3.2 Section B: Stakeholder’s Perception on Variation Orders

61
 In this section, the questions asked on the respondents’

knowledge based on their experiences and opinions. Within the

questions, it can be determine if the stakeholders are knowledgeable in

variation orders which comprises of the following:

a. Level of knowledge regarding variation orders;

b. What kind of civil engineering projects that they

have worked for; and

c. Type of variation orders that normally have

occurred.

3.3.3 Section C: The Causes of Variation Orders

The aim of this research is to identify the causes of variation

orders in the constructions. The scale from 1 (least agree) to 5 (most

agree) is being used in the question to determine the level of agreement

on the causes of variation order based on few related factors. The

related factors are included the cause by client, consultants, contractor,

project’s criteria and external factors.

3.3.4 Section D: The Effects of Variation Orders

This section requires the respondents to scale their agreement

on the effects of variation orders to stakeholders on question. In one of

the questions, the respondents need to state other effects which can

contribute to variation orders other than what have been listed in the

62
 previous question. The respondents also need to give their suggestions

on how to minimize variation orders that might occur in construction

projects.

3.4 SELECTION OF RESPONDENTS

The targeted respondents were stakeholders like Architects, Contractors,

Engineers and Quantity Surveyors, who are from Jabatan Kerja Raya (JKR)

Melaka and have involved in civil engineering projects. The selection of

responding stakeholders were based on their involvement in mega-projects.

This is because they may have more experience in the project management and

are much expert in managing variation orders.

3.5 ANALYSIS METHOD

The data will be analyzed by using Statistical Package for Social Science

software. The following methods are the statistical methods that have been used

for data analysis.

3.5.1 Frequency Analysis

3.5.2 Average Index

63
 In analyzing the data, the following assumed values have been

considered for responses on the types, causes and effects of variation

order for civil engineering works and also ways to minimize it.

In order the determine types, causes and the effects of variation

order for civil engineering works and also ways to minimize it, the

classification of the rating scales categorized are as follows:

Strongly Disagree 1.00 < Average Index > 1.50

Disagree 1.50 < Average Index > 2.50

Neutral 2.50 < Average Index > 3.50

Agree 3.50 < Average Index > 4.50

Strongly Agree 4.50 < Average Index > 5.00

The types, causes, effects and solution of variation order for civil

engineering works were ranked using mean score.

The formula is as follows:

MS = ∑ (f x s)
N

Where s = score given to each factor by the respondents

f = frequency of responses to each rating

N = Total number of respondents

64
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