Introduction
In the construction industry, variation orders are formal instructions issued by a client or project manager to alter the scope, design, or specifications of a project after a contract has been signed. These changes are often unavoidable due to unforeseen circumstances, client preferences, or evolving project requirements. While variation orders can provide flexibility and adaptability, they also present challenges related to cost, time, and project management. This essay explores the advantages and disadvantages of issuing variation orders from the perspective of a construction management student, aiming to provide a balanced analysis supported by academic sources. The discussion will focus on the benefits of accommodating necessary changes and improving project outcomes, contrasted with the potential drawbacks of cost overruns, delays, and disputes.
Advantages of Issuing Variation Orders
One primary advantage of variation orders is their role in ensuring project adaptability. Construction projects often face unexpected challenges, such as site conditions differing from initial surveys or the need to comply with updated regulations. Issuing a variation order allows for adjustments to the original plan, preventing costly errors or legal issues. For instance, if a structural flaw is identified during construction, a variation order can authorise design modifications to ensure safety and compliance (Hosseini et al., 2018).
Additionally, variation orders can enhance project quality and client satisfaction. Clients may request changes to reflect evolving needs or preferences, such as upgrading materials or altering layouts. Accommodating these requests through variation orders ensures the final output aligns with stakeholder expectations, arguably fostering long-term trust and collaboration. As noted by Whyte (2019), incorporating client-driven changes, when managed effectively, can lead to improved project value despite initial disruptions.
Lastly, variation orders provide a formal mechanism to document changes, maintaining transparency and accountability. This structured process helps clarify the scope of alterations, associated costs, and timelines, reducing the risk of misunderstandings between contractors and clients (Sun and Meng, 2009). Therefore, when handled with clear communication, variation orders support effective project governance.
Disadvantages of Issuing Variation Orders
Despite these benefits, issuing variation orders often leads to significant challenges, notably cost overruns. Changes introduced after the contract stage frequently require additional resources, labour, or materials, escalating project budgets. Research by Ndihokubwayo and Haupt (2009) highlights that poorly managed variation orders are a leading cause of cost overruns in construction projects, straining financial planning and profitability.
Furthermore, variation orders can cause delays in project completion. Adjusting designs or scopes mid-project disrupts schedules, as contractors must reallocate resources or await approvals. This is particularly problematic in time-sensitive projects where penalties for late delivery apply. Indeed, delays stemming from variations can also affect subsequent project phases, creating a ripple effect of inefficiencies (Sun and Meng, 2009).
Another critical drawback is the potential for disputes. Disagreements over the necessity, cost, or impact of a variation order can strain relationships between project stakeholders. For example, contractors may argue that certain changes fall outside the agreed scope, leading to claims or legal challenges. Hosseini et al. (2018) note that ambiguous variation orders often contribute to conflicts, undermining project harmony.
Conclusion
In summary, issuing variation orders in construction projects presents both advantages and disadvantages. On the positive side, they enable adaptability to unforeseen issues, improve project quality, and ensure formal documentation of changes. However, the drawbacks, including cost overruns, delays, and the risk of disputes, highlight the need for careful management. The implications of this analysis suggest that while variation orders are an essential tool for flexibility, their issuance must be accompanied by robust planning, clear communication, and precise documentation to mitigate negative impacts. For construction professionals, striking a balance between accommodating necessary changes and maintaining project control remains a critical challenge, meriting further study and strategic practice.
References
- Hosseini, M.R., Chileshe, N., Zuo, J. and Baroudi, B. (2018) Digitalisation in construction industry: Construction professionals’ perspective. Journal of Engineering, Design and Technology, 16(3), pp. 411-428.
- Ndihokubwayo, R. and Haupt, T. (2009) Variation orders on construction projects: Value-adding or waste? International Journal of Construction Management, 9(2), pp. 1-17.
- Sun, M. and Meng, X. (2009) Taxonomy for change causes and effects in construction projects. International Journal of Project Management, 27(6), pp. 560-572.
- Whyte, A. (2019) Integrated design and cost management for civil engineers. CRC Press.
