Sec 4 Group 4.

THE IMPACT OF VARIATION ORDER ON BUILDING CONSTRUCTION PROJECTS 2009E.
C
IN DEBRE BERHAN TOWN
DECLARATION
We declare that this research report entitled the impact of variation orders on building
construction projects in Debre Berhan town. Is the result of our own work, it contains no
materials previously published or written by another person except where due reference is made.
DBU University Department of construction Technology and Management Page i

THE IMPACT OF VARIATION ORDER ON BUILDING CONSTRUCTION PROJECTS 2009E.C
ACKNOWLEDGMENTS
First of all may the praise return to GOD the Most High who sustained us during the course
of our thesis project! We achieved everything through Him who strengthens us.
We would like to convey our truthful gratitude to our Advisor Engineer Alexander and instructor
Remdan for his guidance, motivation, encouragement, critics and recommendation throughout
doing this paper. Also we like to express our sincere thanks to people in construction industry
who provide us with required information concerning their experience. Finally , but not the last
and least by no means , our special thanks and deep grate full goes to our family who have been
with us during all our academic career, without them think to be here is difficult and also
education have been time taking and an expensive task.
DBU University Department of construction Technology and Management Page ii

Table of Contents
DECLARATION .................................................................................................................................... i
ACKNOWLEDGMENTS ........................................................................................................................ ii
LIST OF TABLE.....................................................................................................................................v
LIST OF FIGURE ..................................................................................................................................vi
ABSTRACT .......................................................................................................................................viii
CHAPTER ONE ....................................................................................................................................1
1.1 Introductions ............................................................................................................................1
1.2. Back ground of the Study..........................................................................................................2
1.3 Problem Statement ...................................................................................................................3
1. 4. Objectives of study ..................................................................................................................3
1.5. Significance of the Research ......................................................................................................3
1. 6. Scope of the study ...................................................................................................................4
CHAPTER TWO ...................................................................................................................................5
LITERATURE REVIEW ...........................................................................................................................5
2.1 Introduction..............................................................................................................................5
2.2 Definition of Variation ...............................................................................................................5
2.3 Nature and Types of Variation Orders.........................................................................................6
2.3.1 Beneficial variation orders ...................................................................................................6
2.3.2 Detrimental variation orders................................................................................................7
2.4 Causes of variation orders..........................................................................................................7
2.4.1 Client related changes .........................................................................................................8
2.4.2 Contractor related changes..................................................................................................9
2.4.3 Consultant related changes .................................................................................................9
2.4.4 Other changes .................................................................................................................. 10
2.6 impacts of variation orders on building projects ........................................................................ 10
2.7 Recommended Strategies to Minimize Variation Orders ............................................................ 15
CHAPTER THREE ............................................................................................................................... 17
METHODOLOGY ............................................................................................................................... 17
3.1 Introduction............................................................................................................................ 17
DBU University Department of construction Technology and Management Page iii

3.2 Methodological approaches ..................................................................................................... 18

3.2.1 Qualitative method ........................................................................................................... 18
3.2.2 Quantitative methods ....................................................................................................... 18
3.3 Secondary data ....................................................................................................................... 18
3.3.1 Preliminary literature study ............................................................................................... 18
3.3.2 Full literature study ........................................................................................................... 19
3.4 Primary data ........................................................................................................................... 19
3.4.1 Interviews......................................................................................................................... 19
3.4.2 Questionnaire ................................................................................................................... 20
3.5 Method of Data Analysis .......................................................................................................... 20
CHAPTER FOUR................................................................................................................................. 21
DATA ANALYSIS AND DISCUSSION...................................................................................................... 21
4.0 introductions .......................................................................................................................... 21
4.1 Findings from the Interview................................................................................................ 21
4.2 Data Analysis from the questionnaire ....................................................................................... 22
4.2.2 Questionnaires response rate ............................................................................................ 22
4.2.3 Finding from the queistionarey .......................................................................................... 22
4.2.4 Cause of variation order on building project ....................................................................... 23
4.2.5 Impact of Variation Orders on building project ................................................................... 31
4.2.6 Recommendations to minimize variation orders on building project .................................... 35
CHAPTER FIVE .................................................................................................................................. 42
CONCLUSION AND RECOMMENDATIONS ........................................................................................... 42
5. Introduction.............................................................................................................................. 42
5.1 conclusions ............................................................................................................................. 42
5.1.1causes of variation orders on building projects.....................................................................................................42
5.1.2 Impact of variation orders on building projects ...................................................................................................43

5.1.3 Recommended strategies to minimize variation orders.....................................................................................43
5.2 Recommendation.................................................................................................................... 45
5.3 Challenges during our theses preparation ................................................................................. 46
Reference ........................................................................................................................................ 47
Appendices ...................................................................................................................................... 48
DBU University Department of construction Technology and Management Page iv
LIST OF TABLE
TABLE PAGE
Table 2-1 impacts of variation orders ........................................................................................... 11

Table 2-2impacts of variation orders ............................................................................................ 17
Table 4-1quesionarey returned rate............................................................................................... 23
Table 4-2 cause of variation order from clinet Responses Results ............................................... 25
Table 4-3cause of variation order from contractor Responses Results......................................... 27
Table 4-4 cause of variation order from consultant Responses Results ....................................... 28
Table 4-5 cause of variation order from over all Responses Results............................................ 30
Table 4-6 impact of variation order from clinet response result................................................... 33
Table 4-7 impact of variation order from contractor response result ........................................... 34
Table 4-8impact of variation order from consultant response result ............................................ 35
Table 4-9 impact of variation order on overall result ................................................................... 35
Table 4-10recommendation to minimize of variation order from clinet response result ............. 37
Table 4-11 recommendation to minimize of variation order from Contractor response result .... 39
Table 4-12 recommendation to minimize of variation order from Consultant response result .... 40
Table 4-13 recommendation to minimize of variation order on overall result ............................. 41
DBU University Department of construction Technology and Management Page v

LIST OF FIGURE
FIGURE PAGE
Figure 4.1 Overall Top Five Important Causes……………………………………………..32

Figure 4.2 overall top five important impacts……………………………………………….37
Figure 4.3 Overall Top Five Important recommendations to minimize of variation order....43
DBU University Department of construction Technology and Management Page vi

LIST OF ACRONYM/ABBREVIATIONS
CII Construction Industry Institute

FIDIC Federation International des Ingenieurs-Conseils:
HDCB Housing Development and Construction Bureau
GTP Growth and Transformation Plan
MUDC Ministry of Urban Development and Construction
PPA Public Procurement Agency
RII Relative importance Index
DBU University Department of construction Technology and Management Page vii

ABSTRACT
The occurrence of Variation Orders in construction industry is a regular trend all over the
world. Variations are generally unavoidable in most construction projects. The main objective of
this study was to identify the causes of variation orders, identify the impact of variation order,
and recommended strategies to minimize variation order in construction projects in Debre
Berhan town.
This research aims to identify the causes of variation orders on building construction projects
in Debre Berhan town, impact on building construction projects and recommend minimization or
resolution of variation order from the point of view of owners, consultants and contractor. The
data collected using questionnaires and interviews. The interview was conducted face-to-face
with the interviewee asking questions. Subsequently, a questionnaire survey was submitted to the
participants and 19 responses were received including 5 owners, 6 consultants and 8 contractors.
The data received was analyzed and the importance index was used for ranking. The analyzed
data presents the result of each party independently.
The overall results indicated that the most five important causes of variation orders for the in
construction projects in Debre Berhan town are Client financial problem , Contractor‟s financial
problem, Errors and omissions in design, Safety conditions Design complexity. Moreover, very
high impacts of variation orders were Delay payment, Additional payment for contractor, Time
overruns, Increases overhead expenses, Poor safety condition. The study also found that the top
five recommendations to minimize of variation order are Spend adequate time on pre-tender
planning phases; Supervise the works with an experienced and dedicated supervisor, all involved
parties should plan adequately before works start on site, Carryout detail site investigation such
as detail soil investigation and others, Complete the drawing at tender stage.
DBU University Department of construction Technology and Management Page viii

CHAPTER ONE
1.1 Introductions
Our study is Impact of variation orders on building construction project in Debre Berhan
town. The complexity of the construction industry due to different stakeholder‟s involvement
makes it differ from other industry. This complexity gives rise mostly to unwanted situation like
variation with their attached effect, and the more variation order on a project, the greater the
likelihood that they become time consuming and costly in construction projects.
Variations are generally unavoidable in most construction projects. The owners may need
change during design or construction phases. The changes may be like design, extra works,
omission of works, contracting changes. The real meaning of this study is to provide an
understanding on the causes, impacts, and to suggest the possible strategies to minimize the
impact of variation orders on the construction industry of Debre Berhan town. Variation orders
ultimately lead to delay in completion of projects. Delay in the projects would increase the cost
of construction because of the price adjustment and fluctuations in prices of various components
i.e. labor, fuel, cement and miscellaneous materials.
Whenever the project is delayed, it is difficult to agree upon the additional time and its cost
associated with delay. Dispute and claim arises when both the parties (emplo yer and contractor)
do not agree on the extra time and cost. The results of this study would be beneficial for
employer, contractor and even the general public who can foresee the root the impact of variation
orders on building construction projects in Debre Berhan town as well as its effect.
As the number of variation orders on a project increases, so does the possibility of
Misunderstanding among the contracting parties. Such a misunderstanding may occur Because
one or more of the parties lacks full knowledge of the variation order process itself, The costs
involved in implementing changes, or the delays, conflicts, and interruption of the Construction
sequence and schedule which can adversely impact project coordination. Previous studies on
variation orders are mainly focused on the sources and causes of variation Orders. The sources of
variations include the performance of construction parties, resources Availability, environmental
conditions, involvement of other parties, and contractual relation. Many times delays, cost
DBU University Department of construction Technology and Management Page 1

overrun and quality defects of a construction can be attributed to Variation at various stages of
the project (Burati et al., 1992). Variations and conflicts in construction projects, at work, and
even in our daily lives are very common (Arain and Low, 2006).
1.2. Back ground of the Study

The construction industry in Ethiopia has been on fast growing mode which plays an
Instrumental role in the country development. The city has generated many facilities and
government buildings opportunities. The growth of the city is being accelerated due to the
construction of private and government owned buildings. Large and complex government
buildings have been built, attracting domestic contractors and construction companies from all
over the world.
The government five years Growth and Transformation Plan (GTP) in 2010, the construction
industry is said to be the most beneficial sector as there lots of Projects being rolled out by the
government and to be carried out in the five ye ars plan. The Implementation of government
projects are expected to provide further thrust to the Construction sector in the country.
Therefore, it is important to ensure these projects are being Implemented successfully without
any major problems while minimizing the impacts of variation orders on the project outcome.
Variation orders involved alteration, addition, omission, and substitution in terms of quality,
quantity and schedule of work (Adnan et al., 2010). Any addition, deletion, or any other
revision to project goals and scope of work are considered to be variation, whether they increase
or decrease the project cost or schedule (Ibbs et al., 2001).
Now a day‟s also Debre Berhan town construct different buildings either private or governmental
buildings in a fast growing from the level of G+0-G+7, when we see back to the history of
construction in Debre Berhan town before nine years ago there were few buildings in the town
for example Mahmud Abedusamed market center and other small buildings. accord ing to Debre
Berhan town Urban development officer point of view “ Even though the town has fast growing
construction after 2000 E.C there were problems due to variation orders these problems were ,
the effect on the total cost of the building constructio n project, and quality defaults”.

1.3 Problem Statement

Nowadays, variation orders have become a common problem in Debre Berhan town building
construction projects. Variation orders are issued to correct or modify the original scope of work
because changes during construction projects are unavoidable. But these changes during
construction implementation causes Client financial problem , Contractor‟s financial problem,
Errors and omissions in design, Safety conditions , Design complexity are the result of variation
orders issued during construction projects. Still now, no other method is available for minimizing
the effect of variation orders effectively to reduce its outcome on the given project. However,
their impact of variation orders of the construction building projects can be minimized with an
appropriate study about their cause and negative impacts.
To be able to obtain a better knowledge of the study, the researchers seek to answer the
following specific problems:
1. What are the causes of variation orders in building constructions in Debre Berhan?
2. What are the identified impacts of variation orders in building constructions in Debre
Berhan?
3. What the possible recommendations to minimize variation orders?
1. 4. Objectives of study
The study reported in this paper aims to within various activities/practice in construction
projects especially those associated with common cause‟s variation orders and the impact of the
common causes variation orders and the effect on the total cost.
The objectives of the study include:
1. To Determining the common causes of variation orders
2. to determining the impacts of the variation orders
3. To make recommendation on how to minimize variation orders
1.5. Significance of the Research

The main significance the study is that it will be supportive for private and public building
construction stakeholders in Debre Berhan town building construction stakeholders specifically
to take remedial measures to reduce the occurrence of the problem. The study will also be
helpful for the private construction Companies and most technical departments of government

(such as Housing Development and Construction Bureau (HDCB)) in assessing and taking
remedial measures.
1. To minimize the occurrence of variatio n order to prevent the common causes of
variation order and the effect on the total cost of the building construction projects in
Debre Berhan town from its origin.
2. Technique to manage or handle the occurred variation for reducing the impact of
variation orders on building construction projects in Debre Berhan town.
1. 6. Scope of the study

Our Thesis focuses on assessing the causes, impacts, and recommend minimization or
resolution mechanisms of variation order for Debre Berhan town building construction projects
by interview and questionnaire survey with the relevant professionals who are related to the
topic.

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
One of the major problems facing the construction project is issue of variation order by
during the construction phase. (Ibb, 2001). These changes are inevitable in any construction
project. The problem could become worse when there is a series of variations, when the program
me is affected and when the time spent by the contractor‟s head office staff becomes totally
disproportionate to the value of the contract.
This chapter reviews literatures related to variation orders; including: definition of variation
order; nature and type of variation orders; causes and impacts of variation orders; and
recommended strategies to minimize variation orders on building projects.
2.2 Definition of Variation

There is no single definition of what constitutes a variation. The term „variation‟ as described
and/or defined by various standard forms o f contract differs from one to another but in principle
the definition and/or meaning is more or less similar. Usually, any standard form of building
contract will contain a definition of a variation in terms of specific actions and Activities.
The building contract dictionary defined variations as alterations, additions or omissions in
Work, materials, working hours, work space, etc.
As defined in PPA (2006), “variation” is an instruction given by the engineer, which varies the
Works.
According to FIDIC (1999), “variation” means any change to the works, which is instructed or
approved as a variation.
Hibberd (1986) defined variation as any changes in the quality or quantity of the works as
Mentioned or spelled out in a contract document. Bin- Ali (2008) defined variation orders as any
deviation i.e., alteration, addition or omission, from the contract with regard to contract
Drawings, specifications, and/or bills of quantities. Variation order was also defined as the
Alteration or modification of the design, quality of works, as agreed upon the contract Drawings,
bill of quantities, and/or specifications (Bin-Ali, 2008).

Popescu (1995) indicated that a contract variation order is when a change is made in the Original
contract that will affect the scope of work. Variation order is authorized by the owner and is
often initiated by the contractor. Schexnayder et al. (2004) explained that the variation Order
directives issued by the owner to change the contract by adding or subtracting features within the
scope of the work. Variations that are outside the scope of work require a Supplementary
agreement. Variation orders change the details or conditions of the work and they are used to add
“extra” or delete work.
In general, the term „Variation‟ usually means a change, modification, alteration, revision or
Amendment to the original intent of the contract and/or its works. A variation order is the Formal
document that is used to modify the original contractual agreement and becomes part of project‟s
documents (Fisk, 1997). Furthermore, a variation order is a written order issued to the contractor
after the contractual agreement by the owner, which authorize a change in the work or an
adjustment in the contract sum or even the contract time.
2.3 Nature and Types of Variation Orders

Nature of Variation Orders
The nature of variation orders can be determined by referring to both the reasons for their
occurrence and subsequent effects. (Arain & Pheng, 2005b) distinguished two types of variation
orders, namely: beneficial and detrimental variation
2.3.1 Beneficial variation orders

A beneficial variation order is one issued to improve the quality standard, reduce cost,
schedule, or degree of difficulty in a project (Arain & Pheng, 2005b). It is a variation order
initiated for value analysis purposes to realize a balance between the cost, functionality and
durability aspects of a project to the satisfaction of clients.
A beneficial variation eliminates unnecessary costs from a project. According to Zimmerman &
Hart (1982) all designs have unnecessary cost regardless of how excellent the design team may
be. A beneficial variation order, therefore, seeks to optimize the client's benefits against the
resource input by eliminating unnecessary costs. These benefits are understood to be the
satisfaction of perceived needs for the development project that include social, economic and
commercial aspects. Impliedly, a beneficial variation is initiated in the spirit of adding value to

the project. However, it should be noted that regardless of how beneficial a variation order might
be non-value-adding costs are likely to accrue as a result. For example a variation order to solve
the discrepancies between contract documents involves the abortion of works that have already
been executed. Cost for aborted works should not have been incurred if discrepancies were not
found between contract documents.
2.3.2 Detrimental variation orders

A detrimental variation order is one that negatively impacts the client's value or project
performance (Arain & Pheng, 2005b). Arguably, a detrimental variation order compromises the
client's value system. A client who is experiencing financial problems may require the
substitution of quality standard expensive materials to substandard cheap materials. For
example, on a construction project situated in a salty environment, steel window frames result in
steel oxidation if selected in lieu of timber or aluminum frames.
2.4 Causes of variation orders

Various authors had identified different causes of variation orders in construction projects
both on the private and public projects. Contractual clauses relating to variation allows parties
involved in the contract to freely initiate variation orders within the ambit of the scope of the
work without alteration of the original contract (Ruben, 2008). But variation orders are common
in construction projects, and improved understanding would require identifying their causes. The
works of many researchers show that that variation has come to stay as part of the construction
projects and it cut across various stakeholders.
The causes of project variation may originate from either external or internal pressures that
are being applied to the project (Ming et al., 2004). External causes may be due to technological
changes, changes in the customer expectations and tastes, changes in competitor‟s activities,
changes in government and policies, changes in the economy and finally demographic changes in
the society. Internal causes may result from changes in management policy, changes in
organizational objectives and changes in the long-term survival strategy of the organizations
involved.
The causes of variations are the underlying reasons that precipitate variation orders in
building projects. They are the incident for a variation order to be issued. Because these causes

can affect construction projects adversely, Arain and Pheng (2006) suggested that it is important
to investigate them.
Several researchers (Thomas and Napolitan, 1994; Mukhtar, Bedard & Fazio, 2000; Gray and
Hughes, 2001; Arain, Assaf & Low, 2004) have identified the causes of variation orders. A study
conducted by Alaryan, Emadelbeltagi, Elshahat and Dawood (2014) identified five most
common causes of change or variation orders to include: change in plans by owner; change in
project scope by owner; problem on site; error or omission in design (main element); poor design
and poor working drawing details (secondary element). Alaryan et al (2014) submission finds
support in the assertion of Ashworth, Hogg‟s and Higgs (2013) that the most common reason for
variations is to amend the designs in some way. The needs of the owner may change in the
course of design or construction, market conditions may impose changes to the parameters of the
project, and technological developments may alter the design and choice of the design
consultants (Arain and Pheng, 2006). It is suggested that the consultants‟ review of the design
may promote improvement changes and thus, the operations of the project. Most commonly, lack
of timely and effective communication, lack of integration, uncertainty, a changing environment,
and increasing project complexity are drivers of project variation (Arain et al., 2004). The causes
of variations can be categorized according to the origin agent that initiates the variation (Thomas
and Napolitan, 1994; Jawad et al., 2009; Mohammad et al., 2010). Thus, the causes of variations
identified from literature review are as follows:
2.4.1 Client related changes

The client may directly initiate variations or the variations are required because the client fails
to fulfill certain requirements for carrying out the project. The following are the causes of
variations initiated by the client:
 Change of plans or scope by client;
 Change of construction time by client;
 Client financial problem;
 Change of materials or procedure;
 Change in specification by client

2.4.2 Contractor related changes

These are variations suggested by the contractor or required because the contractor fails to
fulfill certain requirements for the carrying out of the project. The following are the causes of
contractor related variation:
 Unavailability or lack of equipment;
 Shortage of skilled labor;
 Contractor‟s financial problem;
 Unfamiliarity with local environment;
 Absence of specialized construction manager;
 Poor procurement process;
 Lack of communication;
 Contractor‟s lack of experience and judgment;
 Lack of strategic planning;
2.4.3 Consultant related changes

Consultants may directly initiate variations or the variations may be required because the
consultants fail to fulfill certain requirements for the carrying out of the project. The following
are the causes of variations initiated by consultants:
 Change in design by consultant;
 Change in specification by consultant;
 Errors and omissions in design;
 Technology change;
 Lack of coordination;
 Design complexity;
 Inadequate working drawings details;
 Consultant lack of judgment or experience;
 Consultant lack of knowledge of available materials and equipment;
 Consultant lack of required data;
 Design discrepancies;
 Design non-compliance with statutory/government regulation;

 Design non-compliance with client requirements
2.4.4 Other changes

These are variations required by reason of the following causes not directly related to the
participants:
 Weather conditions;
 Safety conditions;
 Changes in government regulations;
 Changes in economic conditions;
 Socio-cultural factors;
 Unforeseen problems.
2.6 impacts of variation orders on building projects

Impact is defined in electronic Webster dictionary as “the force of impression of one thing on
another”. In construction, variation orders can impact portions of the project directly or indirectly
and result in reduced productivity. This is always a subjective issue as the contractor feel that the
loss due to variation order is the fault of the designers and owners. Conversely, owners typically
claim that the loss in productivity is due to poor management on the part of the contractors.
However, not every variation order will impact the productivity of the project.
Variations in any planned activity will cause a disturbance and will require the rearrangement
or review of the existing plan under the recent developments. Given the complex, multi-party
and multi resource nature of the construction industry, it is not difficult to perceive the impacts
of changes on projects.
Impacts of variations were observed by many researchers and its occurrence has an adverse
impact on project performance. Ruben (2008) found that variation orders had an impact on
overall project performance and the major adverse impact of variation orders are time and cost
overruns and disputes between the parties to the contract. Thomas et al. (2002) suggest that
variability generally impedes project performance. Ibbs (1997) concluded that variation orders
affect project performance as they adversely affect productivity and project costs.
According to Arain and Pheng (2005b) variation orders are an unwanted but inevitable reality
of any construction project. Further, Hanna et al. (2002) found that projects with many variation

orders because the contractor to achieve lower productivity levels than planned. Variation orders
adversely impact project performance in terms of cost overruns, time overruns, quality
degradation, health and safety issues and professional relations. Numerous studies have been
done to identify the impacts of variations, relationships between variation and its impacts (Hanna
et al., 2002; Hester et al., 1991; Thomas and Napolitan, 1994; Osman et al., 2009; Ibbs, 1997;
Arain and Pheng, 2005b; Haldun, 1998; CII, 1990; Ibbs, 1995).
The 11 impacts identified from the literature review, as shown in Table 2.1: are discussed below.
NO IMPACT OF VARIATION ORDERS
1 Cost overruns
2 Time overruns
3 Professional relationships
4 Increases over head expenses
5 Delay in payment
6 Procurement delay
7 Dispute among professionals
8 Poor safety condition
9 Progress effected without any delay
10 Completion schedule delay
11 Additional payment for contractor
Table 2-1 impacts of variation orders
A. Cost overruns
The extra work may not have been part of the original scope. Thus any extra costs incurred
due to the changes may cause the project to overrun its original budget. Furthermore the claims
and disputes may also lead to additional expenditure. Both of the previous effects may also lead
to additional cost. Variation orders have both a direct and indirect effect on cost.
Direct cost
Direct costs constitute the additional costs incurred to perform the activities of the current
variation orders. Bower (2000) identified the following direct costs associated with variation
orders:

 Time and material charges related to immediately affected tasks;

 Recalculation of network, increased time-related charges and overheads;
 Reworks and standing time;
 Timing effects for example winter time;
 Inflation, change to cash flow and loss of earnings; and
 Management time, head office and site charges.
While the direct costs associated with a variation order can be easily calculated, Bower (2000)
argued that indirect costs are more difficult to quantify.
Indirect cost
Indirect costs are costs incurred as a result of variation orders, whether they are apparently linked
to them or not. These include:
 Rework and making good on affected trades other tha n the actual variation order. It was
revealed that the cost of rework caused by variation orders accounted for more than four-
fifth of the total costs of rework (Love & Li, 2000).
 Change in cash flow due to effect on inflation and financial charges;
 Loss of productivity due to interruption where the gang has to familiarize with new
working condition, tools and material;
 Cost for redesign and administration of the variation order; and
 Litigation-related costs in case disputes arise due to the variation order.
B. Time overruns
Clients require their construction projects to be completed within minimum time limits. It is
anticipated that projects finished within the shortest possible time achieve some monetary
savings. Contractors are heavily penalized when they exceed the original project delivery date.
The penalty imposed is meant to compensate damages suffered by the client owing to the
prolonged delivery period. Several authors agree that variation orders present as one of the
reasons for project time overruns (Chan & Yeong, 1995, Mohamed 2001). It was found that
variation orders issued during various phases of construction projects negatively affected both
the completion time and costs of projects. Variation orders increases the more significant
productivity losses become. Productivity is the amount of output over a unit of time. Therefore,
loss in productivity implies loss of time and subsequent delays.

C. Professional relations
A construction project is not merely brick and mortar brought together. Rather, it creates
professional relationships between parties to the contract. Each project successfully completed
constitutes an added experience to participants and their reputation builds up. But disputes may
arise between parties to the contract due to variation orders. Misunderstandings may arise when
contractors are not satisfied with the determination of the valuation of variation orders by the
client‟s consultant. Parties to a contract are left to argue over the cost, time effects and due
compensation of a variation order (Bower, 2000). Possibly because contractors are not confident
about the outcome of such negotiations, they usually request higher values for variation orders
than the actual cost incurred. Bower (2000) opined that consequently there is tension between
parties as the contractor continually pushes the client to settle claims for additional costs while
invariably feeling that the reimbursement has been insufficient. This can be very damaging to the
relationship between the representatives of all parties (Bower, 2000). Charoenngam et al. (2003)
remarked that disputes between the client and the contractor can occur if variation orders are not
managed carefully. Harbans (2003) warned that unless a mutually acceptable solution is agreed
by the parties, valuation of variations in the form of variation orders will continue to remain at
the forefront of disputes and claims making their way ultimately to arbitral tribunals or the
corridors of justice. Finsen (2005) found that a large proportion of current arbitrations were on
claims for additional time and additional expenses. Ssegawa et al. (2002) reported that more than
one-third of disputes pertained to how to determine losses that stem from variation orders. The
excessive occurrence of variation orders due to design errors or omission may undermine the
professionalism of the designer. Workers are demoralized when they have to demolish a portion
work that they had already completed.
D. Increases in overhead expense
Variations need to go through a few stages of processing procedures as mentioned earlier and
require to be evaluated before they can even be implemented (O‟Brien, 1998). Because of this,
the overhead expense for all the parties involved will increase as there is a lot of work and
paperwork need to be done. However, normally these overhead charges are provided for from the
contingency fund allocated for the construction projects (Arain and Low, 2005).

E. Delays in payment
Delay in payment occurred frequently due to variatio ns in construction project (CII, 1990).
CII (1995), variations may hinder the project progress as mentioned before thus leading to delays
in the construction works done which will eventually affecting payments to the contractors. If
the main contractor does not have enough funds to pay the subcontractors then this may cause
severe problem to both the main contractor and the subcontractor as well.
F. Procurement delay
Revised procurement request may be required when variations occur during the constr uction
phase of the project (O‟Brien, 1998). Arain and Low (2005), feels that variations that require
new materials and specialized equipment are the cause for frequent procurement delays.
Procurement delays were common effects of variations related to new resources for construction
projects (Hester et al., 1991).
G. Disputes among professionals
Like poor professional relations, disputes among professionals are also impacts of frequent
variations in construction projects. The disputes over variation orders and claims are inevitable
and the variation clauses are often the source of project disputes (CII, 1995). Clear procedures
presented in the contract and fair allocation of risks can help in resolving disputes through
negotiation rather than litigation (CII, 1995). Frequent communication and strong coordination
can assist in eliminating the disputes between professionals.
H. Poor safety condition
The safety conditions in construction projects may be affected by variations (O‟Brien,

1998; Arain et al., 2004). Arain and Low (2005), this may be caused by the additional safety
measures that may be required during construction because of variations.
I. Progress is affected but without any delay

Project progress and quality may be affected by variations (Assaf et al., 1995). During
construction, time is of the essence. However, according to Arain and Low (2005), only major
variations during the project may affect the project completion time because the contractor
would usually try to accommodate the variations by utilizing the free floats in the construction

schedules. Therefore, variations will affect the project progress but without any delay in the
project completion date.
J. Completion schedule delay
Completion schedule delay is a frequent result of variations in construction projects (Ibbs,
1997b). The magnitude of the schedule being delayed due to variations was reported to be 9
percent of the original schedule for 71 fixed price projects studied (Zeitoun and Oberlender,
1993). Kumaraswamy et al., (1998), studied claims for extension of time dye to excusable delays
in Hong Kong‟s civil engineering projects. Their findings suggested that half of the projects
surveyed were delayed because of variations. Delays in projects occur mainly because not only
time is needed in evaluating and imposing variations but also due to the fact that variations have
cumulative impacts on construction projects as reported by Reichard and Norwood (2001). All
the potential effects of variations are also correlated, resulting in the completion schedule delays
in construction projects.
K. Additional payments for contractor
Arain and Low (2005), observed that one of the most common potential effects of variations
in construction projects is additional payments for the contractor. This is because variations are
normally considered to be a common source of additional works for the contractor (O‟Brien,
1998). Due to additional payments, the contractor looks forward to variations in the construction
project. Some contractors even look for ways and excuses to initiate variations during
construction just to obtain additional payments and increase their profit.
2.7 Recommended Strategies to Minimize Variation Orders

In order to minimize variation orders control system should be established for the ultimate
benefit of owners. Baharuddin (2005) concluded variation orders can be minimized if all the
parties involved in projects are aware that preliminary work before tendering must be carried out,
for example detailed site and soil investigations. While design errors and omissions cannot be
completely avoided, they can be reduced especially if designers assessed their workloads before
committing themselves to new contracts (Ruben, 2008List of strategies that suggested by
different researchers are identified as follows (Bower, 2000; Baharuddin, 2005; Chan and

Yeong, 1995; Arain, 2005; Ruben, 2008; Bin-Ali, 2008; Willis, 1980; Ming et al., 2004; Levy,
2006; Al-Hakim, 2005a; Sweeney, 1998; Formoso, 1999).
These are: Table 2.2 summarizes the Recommended Strategies to Minimize Variation Orders
NO Recommended Strategic actions to minimize variation orders

1 Get accurate information and research with regard to procurement procedure, material,
and plant
2 Carryout detail site investigation such as detail soil investigation and others
3 Supervise the works with an experienced and dedicated supervisor
4 The consultant should ensure that the design or specification fall within the approved
budget
5 Complete the drawing at tender stage
6 All parties should forecast unpredictable conditions
7 Clients should provide a clear brief of the scope of works
8 All involved parties should plan adequately before works start on site
9 Enhance communication between the parties
10 The consultant should coordinate crossly at design stages.
11 Spend adequate time on pre-tender planning phases
12 The consultant should produce a concluding and contract document
13 Once the tender is awarded, make no changes to the specification
Table 2-2impacts of variation orders

CHAPTER THREE
METHODOLOGY
3.1 Introduction
This chapter outlines the research methodology and identifies the tools and techniques
employed in a systematic data collection exercise. The methodology describes the practical way
in which the whole research project has been organized (Oliver, 2004). According to Walliman
(2005), a plan of action must be developed that shows how the problems will be investigated,
what information will be collected using which methods, and how this information will be
analyzed in order to arrive at conclusions and develop recommendations. Research projects
synthesis and analyze existing theory, ideas, and findings of other research, in seeking to answer
a particular question or to provide new insights (Fellows & Liu, 1997).
Methodology is a plan of action that shows how the problems will be investigated, what
information will be collected using which methods, and how this information will be analyzed in
order to arrive at conclusions and develop recommendations. The problem investigated in this
study is the impact of variation orders on building projects in Debre Berhan town. It is
anticipated that the identification of the causes of variation orders may lead to their reduction,
possible elimination and improvement in overall building projects. Once the problem statement
has been formulated, it should become evident what kind of data will be required to study the
problem, and also what kind of analysis would be most appropriate to analyze the data
(Walliman, 2005).
The data was collected through two stages, the first stage was interviewing experts of
construction industry in Debre Berhan town building construction and the second stage was a
questionnaire survey. Interviewing experts designed to adjust the selected list obtained from the
literature review for the repetitive units in Debre Berhan town building construction industry.
Subsequently, the questionnaire survey was conducted to rank the causes of variation order in the
repetitive units in Debre Berhan town building construction. The questionnaire design, the
sample size and the survey approach are discussed through this chapter.

3.2 Methodological approaches

The methods of collecting data impact upon the analyses which may be executed and
subsequently, the results, conclusions, values and validity (Fellows & Liu, 1997). To improve the
validity of the research findings, the triangulation approach was adopted for data gathering. This
approach consists of combinations of qualitative and quantitative methods strengthened with the
literature review.
3.2.1 Qualitative method

The qualitative approach seeks to gain insights and understanding people's perceptions of 'the
world.' The beliefs, understanding, opinions, views of people are investigated (Fellows & Liu,
1997). Qualitative methods in this study seek to obtain the perception of construction industry
stakeholders relative to the impact of variation orders on building project. Observations were
done on specific construction projects.
3.2.2 Quantitative methods

Quantitative methods focus attention on measurements and amounts (more and less, larger
and smaller, often and seldom, similar and d ifferent) of the characteristics displayed by the
people and events that the researcher studies (Thomas, 2003).
Quantitative data included the following:
 Quantifying apparent waste and categorization of variation orders; and
 Closed-ended questions.
3.3 Secondary data

The secondary data is in the form of literary sources covering relevant topics of the subject
matter. Two distinct literature studies were adopted as proposed by Melville and Goddard
(1996), namely a preliminary and a full literature study.
3.3.1 Preliminary literature study

A preliminary literature study allowed a feel for the topic to be acquired and the issues
involved, and an understanding of how the proposed research would fit into it. A preliminary
literature provided an understanding of the background and key concepts of the research study
and the basis upon which the problem statement was formulated.

3.3.2 Full literature study

A full literature study is part of the research process itself rather than part of the preparation
for research. Such a literature review demonstrates that a researcher is knowledgeable of the area
under investigation, shows how previous research studies support the current one and generate
new research ideas through discovering what was left behind by others. The literature examined
was compiled mainly from textbooks, journals, conference proceedings, theses and dissertations.
According to Melville & Goddard (1996), these are the most reliable sources of information and
are the most referenced in scientific reporting.
3.4 Primary data

A preliminary literature study allowed a feel for the topic to be acquired and the issues
involved, and an understanding of how the proposed research would fit into it. A preliminary
literature provided an understanding of the background and key concepts of the research study
and the basis upon which the problem statement was formulated.
3.4.1 Interviews
The interview was conducted face-to-face with the interviewee asking questions selected
individuals. The interview is a useful technique for collecting data which would probably not be
accessible using techniques such as observations and questionnaires. Semi-structured interview
were conducted with senior project supervision and follow up team leader, a senior contract
administrator, and a senior project manager to gather information on causes and impacts of
variation orders on public building projects as well as to look for recommendations if any to
minimize them.
Interview is a useful method of obtaining information and opinions from experts during the
early stages of the research (Ndihokubwayo, 2008). Basically, there are three fundamental types
of interviews: structured, semi-structured and unstructured. The structured interview is controlled
by the interviewer through asking pre-defined questions and collecting answers with little or no
variation. This type is usually time-consuming (often lasting several hours) and can be difficult
to manage. In addition, the lack of predetermined interview questions provides little guidance on
what to talk about. Semi-structured interview lies between the two mentioned types, were the
interviewer raises a topic and approach it through asking questions that probing more details.

This allows the interviewer or interviewee to diverge in order to pursue an idea or response in
more detail.
3.4.2 Questionnaire
Questionnaire is the simplest and time saving method to collect data effectively from a huge
number of respondents. Formulating questions from the identified variables, the questionnaire
was designed to gather data from professionals that were involved in public building projects in
Debre Berhan town building construction.
A questionnaire enables a researcher to organize the questions and receive replies without
actually having to talk to every respondent (Walliman, 2005). The questions are fixed and are the
same for each respondent. Most of the questionnaires were hand-delivered and responded to in
the presence of the researcher. This option might be time consuming but yielded a high response
rate. Other questionnaires were sent by post where deemed necessary, but yielded a low response
rate.
3.5 Method of Data Analysis

The responses to the questionnaire was based on Likert‟s scale of five ordinal measures
which was from one 1 to five 5 arranged in ascending order according to the degree of
contribution to each question. The main approach used to analyze the data was by using the
Relative important Index (RII) technique. The responses are analyzed using the Microsoft Excel
software package. The analysis included ranking the factors in terms of degree of effecting.
In the computation of the relative important index the following formula was used;
RII = (5n5 + 4n4 + 3n3 + 2n2 + n) ……… Equation
5 (n5 + n4 + n3 + n2 + n)
Where: (RII) Relative Index n5, n4, n3… number of responding indices.

CHAPTER FOUR
DATA ANALYSIS AND DISCUSSION
4.0 introductions
This chapter analyses the data collected using questionnaires and interviews. The purpose of
this chapter is to analyze the gathered data from the previous stage of the research. In addition,
the analysis methodology and survey results are going to be discussed.
The real meaning of this study is to provide an understanding on the causes, impacts, and to
suggest the possible strategies to minimize the impact of variation orders on the construction
industry of Debre Berhan town. . The objective of this chapter is to identify the highest ranked
factors for discussion and to find correlation with findings from the interviews.
4.1 Findings from the Interview

From the interview thirty three (33) causes of variation orders in answering the first question,
eleven (11) main impacts of variation orders in answering for the second question and thirteen
(13) recommended strategies to minimize variation orders in answering the third question were
identified. The findings from the interview causes of variation orders in answering revealed that
Client financial problem, Contractor‟s financial problem, Design complexity, Change in design
by consultant and Inadequate working drawings details were the causes which contribute to the
occurrence of variation orders.
The findings from the interviews the impacts of variation orders in answering revealed that
time overrun and cost overruns. The interviewee suggested that it is possible to minimize the
occurrence variation orders with the most common strategies which always pointed out by
experienced construction practitioners.
The interviewee suggested that it is possible to minimize the variation order,
 by All involved parties should plan adequately before works start on site,
 Complete the drawing at tender stage

 Spend adequate time on pre-tender planning phases
 Supervising the works with experienced supervisors can minimize variation orders on a
building project.
4.2 Data Analyses from the questionnaire
4.2.2 Questionnaires réponses rate

The respondent were grouped into three major group namely Clint, consultant, and contractor.
The returns from the four groups are seeing in table 4.1 below which shows an average response
rate. First we distributed 28 questionnaires to the respondents and then returned 19
questionnaires from different respondents and their rates shown below in the table:
Respondent group Number 0f Number of % of returned

questionnaires distribute questioners returned questioners
Clint 8 5 62.5%
Contractor 12 8 66.68%
Consultant 8 6 75%
Table 4-1quesionarey returned rate
4.2.3 Finding from the questionnaires

In this section, we analyzed causes, impacts, and recommended strategies to minimize
variation order by taking their degree of frequency, scales and calculate average index as we
specified in chapter three according to viewpoints of clients, contractors, consultants, and finally
we analyzed overall points of view.
The response we analyzed from thirty three(33)cause of variation order identified from t he
literatures, eleven (11)impact of variation orders and thirty (13)strategies to minimize variation
order on building projects were used in questionnaire survey .all the impact of variation order
and the suggested strategies to minimize them were used as identified from the literatures. A
ranking system using the Relative important index (RII) method was calculated to find the most
significant factor for each section.

The questionnaire has three are the same ordinal measures or scales from 1-5 for causes, 1-5
for impacts,1-5 for recommended strategic minimizations of variation order on building
construction projects which were found in Debre Berhan town and the data generated from the
questionnaire survey was analyzed by using frequency analysis and Relative important index
(RII).
Relative important index
The relative importance index (RII)method was used for similar studies to determine the
relative importance of various factors (Enshassi et al., 2010).the (RII)method is used for this
study to find out the relative importance of the various causes, impacts and minimize and
recommendation of variation orders based on respo nses from various groups; client, consultants,
and contractors. The five point scale, ranged from 1 (Never) to 5 (always) was adopted and
transformed to relative importance index using the following equation
RII= ∑W/A*N
Where: W is the weight given to each factor by the respondents and ranges from 1 to 5;
A – The highest weight = 5;
N = the total number of respondents. The RII was used to rank the different causes, impacts and
strategies to minimize of variation orders in order to cross-compare the relative importance of the
factors as perceived by the three groups of respondents.
4.2.4 Cause of variation order on building project

The frequency of the causes of variation orders were identified by using a 5 point Like Scale,
namely Never = 1; Seldom = 2; Sometimes = 3, Often = 4; and Always = 5. The causes of
variation orders were ranked by comparing their relative index.
A. Client response result
Table 4.2 presents the relative importance index (RII) and ranks of each cause based on Client
responses received.
NO `cause of variation order RII=∑W/A*N rank
1 Contractor‟s financial problem 0.8 1
2 Client financial problem 0.68 2
3 Design complexity 0.68 3

4 Safety conditions 0.68 4

5 Change of plans or scope by client 0.64 5
6 Errors and omissions in design 0.6 6
7 Change in design by consultant 0.6 7
8 Design non-compliance with client requirements 0.6 8
9 Change of construction time by client 0.52 9
10 Consultant lack of knowledge of available materials and 0.52 10
equipment;
11 Design non-compliance with statutory/government 0.52 11
regulation
12 Change in specification by consultant 0.48 12
13 Design discrepancies 0.48 13
14 Lack of strategic planning 0.48 14
15 Weather conditions 0.48 15
16 Changes in government regulations 0.48 16
17 Inadequate working drawings details 0.44 17
18 Consultant lack of judgment or experience 0.44 18
19 Consultant lack of required data 0.44 19
20 Unavailability or lack of equipment 0.44 20
21 Shortage of skilled labor 0.44 21
22 Absence of specialized construction manager 0.44 22
23 Poor procurement process 0.44 23
24 Lack of communication 0.44 24
25 Contractor‟s lack of experience and judgment 0.44 25
26 Changes in economic conditions 0.44 26
27 Change of materials or procedure 0.4 27
28 Change in specification by client 0.4 28
29 Lack of coordination 0.4 29
30 Unforeseen problems 0.36 30

31 Unfamiliarity with local environment 0.32 31

32 Socio-cultural factors 0.32 32
33 Technology change 0.32 33
Table 4-2 cause of variation order from Client responses results
As shown in Table 4.2, the top five most important causes of variation on building
construction project in Debre Berhan town as received by respondents include Contractor‟s
financial problem, Client financial problem, Design complexity, Safety conditions and Change of
plans or scope by client.
“Contractor‟s financial problem” and is the most important cause of var iation order from the
owner perspective as it was ranked the first with relative importance index (RII) =0.8. “Client
financial problem”, “Design complexity”, and Safety conditions is ranked the second, third and
fourth important cause with equal relative importance index (RII) = 0.68. The fifth important
cause is “Change of plans or scope by client” With RII=0.64.
B. Contractor response result
Table 4.3 presents the relative importance index (RII) and ranks of each cause based on
Contractor responses received.

4 Contractor‟s financial problem 0,675 4
equipment;


regulation
Table 4-3cause of variation order from contractor responses results
As shown in Table 4.3, the top five most impact of variation on building construction project
in Debre Berhan town as received by respondents include Errors and omissions in design, Safety
conditions, Client financial problem, Contractor‟s financial problem and Lack of strategic
planning .“ Errors and omissions in design” is the most impact of variation order from the Client

perspective as it was ranked the first with relative importance index (RII) = 0.8. “Safety
conditions” is ranked the second impact with relative importance index (RII) = 0,775. “Client
financial problem” is ranked the third impact with relative importance index (RII) =0.75.
“Contractor‟s financial problem” is ranked the third impact with relative importance index
(RII) =0,675. The fifth important impacts are “Lack of strategic planning.” With (RII) =0.657.
C. Consultant response result
Table 4.4 presents the relative importance index (RII) and ranks of each cause based on
Consultant responses received.
NO `cause of variation order RII= ∑W/A*N rank
13 Consultant lack of knowledge of available 0.638 13
materials and equipment;


regulation

Table 4-4 cause of variation order from consultant responses results
As shown in Table 4.4, the top five most important causes of variation on building
construction project in Debre Berhan town as received by respondents include Client financial
problem, Shortage of skilled labor, Contractor‟s financial problem, Change of construction time
by client and Errors and omissions in design.
“Client financial problem” Shortage of skilled labor, and Contractor‟s financial problem is
the most important cause of variation order from the owner perspective as it was ranked the first
with equal relative importance index (RII) = 0.766.
“Change of construction time by client” is ranked the third important cause with relative
importance index (RII) =0.735. The fifth important cause is “Errors and omissions in design.”
With RII=0.7.

D. overall of Cause of variation order result

Table 4.5 the relative important index (RII) and ranks of each cause based on overall responses.

equipment;
regulation


Table 4-5 cause of variation order from over all responses results
Five most important cause of variation order on building project

As shown in Table 4.5, the top five most important the cause of variation orders on building
construction projects in Debre Berhan town as perceived by all respondents include Client
financial problem , Contractor‟s financial problem, Errors and omissions in design, Safety
conditions and Design complexity.
“Client financial problem” is the cause of variation orders on building construction projects in
Debre Berhan town according to the overall responses with RII= 0.736. This cause ranked the
third important according to the owner and Contractor responses and the first in the consultant
results. These results are showing that this cause is the most significant cause among all project
parties on building construction projects in Debre Berhan town.
“Contractor‟s financial problem” is the second top cause of variation order With RII = 0.736
according to the overall results. This cause ranked the first important according to the owner
result, the fourth ranked in contractor result and the third in the consultant.
The third important cause is “Errors and omissions in design” with RII = 0.726 and it is
the first from the contractor point of view, The fifth ranked in consultant result, and the six
ranked in contractor result. “Safety conditions” is forth significant cause with RII = 0.726 and
according to the overall result. This ranked the second important to contractor result, the fourth
ranked owner result, and the six ranked in consultant result.

0.76
0.74
0.72
0.7
0.68
0.66
0.64
0.62 Series 1
0.6
0.58 Column3
Column2
Figure 4.1 overall top five important causes
4.2.5 Impact of Variation Orders on building project

The frequency of the impact of variation orders were identified by using a 5 point Like Scale,
namely no impact= 1; low impact = 2; medium impact = 3, high impact = 4; and very high
impact = 5. The impact of variation orders were ranked by comparing their relative index.
Table 4.6 presents the relative importance index (RII) and ranks of each impact based on
Client responses received.
NO Impact of Variation Orders RII=∑W/A*N Rank
1 Time overruns 0.72 1
2 Delay in payment 0.72 2
3 Increases overhead expenses 0.68 3
4 Additional payment for contractor 0.68 4
5 Cost overruns 0.64 5
6 Procurement delay 0.6 6
7 Poor safety condition 0.6 7
8 Progress effected without any delay 0.52 8
9 Dispute among professionals 0.48 9

10 Completion schedule delay 0.48 10

11 Professional relationships 0.4 11
Table 4-6 impact of variation order from Client response result
in Debre Berhan town as received by respondents include Time overruns, Delay in payment ,
Increases overhead expenses, Additional payment for contractor and Cost overruns.
“Time overruns “and Delay in payment is the most impact of variation order from the owner
perspective as it was ranked the first with equal relative importance index (RII) = 0.72.
“Increases overhead expenses” and Additional payment for contractor is ranked the second
impact with equal relative importance index (RII) 0.68. The fifth important impact is “Cost
overruns” With RII=0.64.
contractor responses received.

Table 4-7 impact of variation order from owner response result
in Debre Berhan town as received by respondents include Additional payment for contractor,
Time overruns, Increases overhead expenses, Poor safety condition and Delay in payment.
“Additional payment for contractor” is the most impact of variation order from the owner
perspective as it was ranked the first with relative importance index (RII) = 0.875. “Time
overruns, and Increases overhead expenses” is ranked the second impact with both are equal
relative importance index (RII) = 0.8. “Poor safety condition” is ranked the third impact with
relative importance index (RII) = 0.725. The fifth important impact is “Delay in payment” With
(RII) =0.7.
consultant responses received.
8 Increases over head expenses 0.566 8
Table 4-8impact of variation order from consultant response result
in Debre Berhan town as received by respondents include Delay in payment, Completion
schedule delay, Poor safety condition, Additional payment for contractor and Cost overruns.
“Delay in payment” is the most impact of variation order from the owner perspective as it was
ranked the first with relative importance index (RII) =0.8.
“Completion schedule delay” is ranked the second impact with relative importance index (RII)
= 0.733334. “Poor safety condition”, and Additional payment for contractor is ranked the third
impact with equal relative importance index (RII) =0.7. The fifth important impact is “Cost
overruns” With RII=0.63334.
D. overall of impact of variation order result
Table 4.9 the relative important index (RII) and ranks of each impact based on overall responses.
Table 4-9 impact of variation order on overall result
Five most important impact of variation order on building project

As shown in Figure 4.9, the top five most important impacts of variation orders on building
construction projects in Debre Berhan town as perceived by all respondents. Delay payment,
Additional payment for contractor, Time overruns, Increases overhead expenses, and Poor safety
condition.
The top impact is “Time overrun” with RII = 0.736. It is ranked in the first impacts according
to owner, the second ranking of contractor result and seven ranking in consultant result.

The second impact is “Additional payment for contractor” by RII = 0.736. It is the first ranking
contractor result and fourth ranking of owner and consultant result.
Third most significant impact is “Time overruns” by RII = 0.705 in the top three impacts
according to owner and consultant results but was not listed in the top causes from the contractor
point of view.
The fourth and fifth impacts are “Increases overhead expenses and “Poor safety condition” with
RII = 0.695 and 0.685 respectively.
0.74
0.73
0.72
0.71
0.7
0.69 Series 1
0.68
Column2
0.67
0.66 Column1
0.65
Delay in Additional Time Increases over Poor safety
payment payment for overrunsRII head condition
RII=0.736 contractor =0.705 expensesRII =0.685
RII=0.736 0.695
Figure 4.2 overall top five important impacts
4.2.6 Recommendations to minimize variation orders on building project

The frequency of the recommendation to minimize of variation orders were identified by using
a 5 point Like Scale, namely un important= 1; less important = 2; important = 3, very important
= 4; and very high important = 5. The recommendation to minimize variation orders were ranked
by comparing their relative index.
Table 4.10 presents the relative importance index (RII) and ranks of each recommendation to
minimize based on Client responses received.
NO Recommended Strategic actions to minimize variation orders RII=∑W/A*N Rank
1 All involved parties should plan adequately before works start 0.84 1
on site

2 Supervise the works with an experienced and dedicated 0.76 2

supervisor
3 Spend adequate time on pre-tender planning phases 0.76 3
4 Clients should provide a clear brief of the scope of works 0.68 4
5 Carryout detail site investigation such as detail soil 0.64 5
investigation and others
6 Enhance communication between the parties 0.6 6
7 All parties should forecast unpredictable conditions 0.56 7
8 Get accurate information and research with regard to 0.52 8
procurement procedure, ma trial, and plant
9 Complete the drawing at tender stage 0.52 9
10 The consultant should coordinate crossly at design stages. 0.52 10
11 The consultant should produce a concluding and contract 0.52 11
document
12 Once the tender is awarded, make no changes to the 0.52 12
specification
13 The consultant should ensure that the design or specification 0.48 13
fall within the approved budget
Table 4-10recommendation to minimize of variation order from Client response result
As shown in Table 4.10, the top five most important recommendation to minimize of
variation on building construction project in Debre Berhan town as received by respondents
include All involved parties should plan adequately before works start on site, Supervise the
works with an experienced and dedicated supervisor, Spend adequate time on pre-tender
planning phases, Clients should provide a clear brief of the scope of works ,and Carryout detail
site investigation such as detail soil investigation and others.
“All involved parties should plan adequately before works start on site” is the most important
recommendation to minimize of variation order from the owner perspective as it was ranked the
first with relative importance index (RII) = 0.84. “Supervise the works with an experienced and
dedicated supervisor” is ranked the second important recommendation to minimize with relative

importance index (RII) = 0.76. “Spend adequate time on pre-tender planning phases” is ranked
the third important recommendation to minimize with relative importance index (RII) =0.76.
“Clients should provide a clear brief of the scope of works” is ranked the third important
recommendation to minimize with relative importance index (RII) = 0.68. The fifth important
recommendation to minimize is “Carryout detail site investigation such as detail soil
investigation and others” With (RII) =0.64.
minimize based on Contractor responses received.
NO Recommended Strategic actions to minimize variation orders RII=∑W/A*N Rank

supervisor
on site
5 Carryout detail site investigation such as detail soil investigation 0.75 5
and others
specification
9 The consultant should ensure that the design or specification fall 0.625 9
within the approved budget
document

Table 4-11 recommendation to minimize of variation order from Contractor response result
include Supervise the works with an experienced and dedicated supervisor, All involved parties
should plan adequately before works start on site, Spend adequate time on pre-tender planning
phases, Complete the drawing at tender stage and Carryout detail site investigation such as detail
soil investigation and others.
“Supervise the works with an experienced and dedicated supervisor, All involved parties
should plan adequately before works start on site, and Spend adequate time on pre-tender
planning phases” is the most important recommendation to minimize of variation order from the
contractor perspective as it was ranked the first with equal relative importance index (RII) = 0.8.
“Complete the drawing at tender stage” is ranked the fourth important recommendation to
minimize with relative importance index (RII) = 0.775.
The fifth important recommendation to minimize is “Carryout detail site investigation such as
detail soil investigation and others” With (RII) =0.75.
minimize based on Consultant responses received.
NO Recommended Strategic actions to minimize variation orders RII=∑W/A*N rank
supervisor
5 All involved parties should plan adequately before works 0.6 5
start on site


document
specification
Table 4-12 recommendation to minimize of variation order from Consultant response result
include Supervise the works with an experienced and dedicated supervisor, Carryout detail site
investigation such as detail soil investigation and others, Complete the drawing at tender stage,
Spend adequate time on pre-tender planning phases, All involved parties should plan adequately
before works start on site.
“Supervise the works with an experienced and dedicated supervisor” is the most important
recommendation to minimize of variation order from the Consultant perspec tive as it was ranked
the first with relative importance index (RII) = 0.76. “Carryout detail site investigation such as
detail soil investigation and others” is ranked the second important recommendation to minimize
with relative importance index (RII) = 0.7.
“Complete the drawing at tender stage” and, “Spend adequate time on pre-tender planning
phases” is ranked the third important recommendation to minimize with equal relative
importance index (RII)= 0.635.
The fifth important recommendation to minimize is “All involved parties should plan adequately
before works start on site” With (RII) =0.6.

D. overall of recommendation to minimize of variation order result

Table 4.13 the relative important index (RII) and ranks for the recommendation to minimize
of variation order based on overall responses.
NO Recommended Strategic actions to minimize variation orders RII=∑W/A*N rank
supervisor
on site
specification
document
Table4-13 recommendation to minimize of variation order on overall result

Five most important recommendations to minimize of variation order on building project

As shown in the Figure 4.13 the top five most important recommendation to minimize of
variation orders on building construction projects in Debre Berhan town as perceived by all
respondents.
first “Spend adequate time on pre-tender planning phases” with RII = 0.7472 is the
recommendation to minimize of variation order and it was the third ranking from the owner and
contractor perspective, and the fourth ranking of consultant result.
Secondly, “Supervise the works with an experienced and dedicated supervisor” with RII =
0.737.and the first ranking of contractor and consultant result, and the second ranking of owner
result.
Third, the recommendation to minimize of variation order is “All involved parties should
plan adequately before works start on site” with RII = 0.737 and the first ranking of owner result
,the second ranking of contractor result , and fourth ranking of consultant result .
The fourth and the fifth are “Carryout detail site investigation such as detail soil investigation
and others” and “Complete the drawing at tender stage” by RII = 0.695 and 0.663 respectively.
0.76
0.74
0.72
0.7
0.68
0.66 Series 1
0.64 Column2
0.62 Column1
Spend Supervise the All involved Carryout detail Complete the
adequate time works with an parties should site drawing at
on pre-tender experienced plan adequately investigation tender stage RII
planning and dedicated before works such as detail 0.663
phasesRII 0.747 supervisorRII start on site RII soil
0.737 0.737 investigation
and others RII
0.695
Figure 4.3 Overall Top Five Important recommendations to minimize of variation order

CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5. Introduction
This chapter summarizes the research and aims to provide recommendations and Conclusions
for the issue of variation orders in construction industry in Debre Berhan town and suggests
some recommendations to minimize variation order.
5.1 conclusions
This is the last chapter of the study and it includes conclusions and recommenda tions based
on the findings from the interviews and questionnaires
5.1.1causes of variation orders on building projects

The first objective of the study was to analyze the causes of variation orders on building
construction projects in Debre Berhan town from the interview and questionnaire. From the
literatures, thirty three (33) causes of variation order on building project were identified.
The client responses result showed that include Contractor‟s financial problem, Client
financial problem, Design complexity, Safety conditions and Change of plans or scope by client
were the top five most frequent causes of variation orders on a building project. According to the
contractor response result the top five most cause of variation order on building construction
project are include Errors and omissions in design, Safety conditions, Client financial problem,
Contractor‟s financial problem and Lack of strategic planning . According to the consultants
response result the top five most important causes of variation on building construction project
are include Client financial problem, Shortage of skilled labor, Contractor‟s financial problem,
Change of construction time by client and Errors and omissions in design.
From the overall responses, it was concluded that Client financial problem, Contractor‟s
financial problem, Errors and omissions in design, Safety conditions and Design complexity.
From the findings of the interview and questionnaire Client financial problem, Contractor‟s
financial problem, Errors and omissions in design, Safety conditions, Design complexity,
Change in design by consultant and Inadequate working drawings details.

5.1.2 Impact of variation orders on building projects

The second objective was to identify the various impacts of variation orders on building
construction projects in Debre Berhan town From the 11 impacts of variation orders, Time
overruns, Delay in payment, Increases overhead expenses, Additional payment for contractor and
Cost overruns Were the top five most frequent impacts of variation orders according to the
responses of the clients.
The contractor response result the top five most frequent impacts of variation orders were
Additional payment for contractor, Time overruns, Increases overhead expenses, Poor safety
condition and Delay in payment.
According to the responses of the consultant Delay in payment, Completion schedule delay,
Poor safety condition, Additional payment for contractor and Cost overruns were the top five
most frequent impacts of variation orders on public building projects.
From the overall responses received, it was concluded that the top most impacts of variation
Orders on public building projects were Delay payment, Additional payment for contractor,
Time overruns, Increases overhead expenses, and Poor safety condition.
From the findings of the interview and the questionnaires, the major impacts of variation
orders on public building projects were Delay payment, Additional payment for contractor, Time
overruns, Increases overhead expenses, and Poor safety condition and cost overruns.
5.1.3 Recommended strategies to minimize variation orders

The third objective was to suggest strategic minimizations of variation orders on building
construction projects in Debre Berhan town From the 13 suggest strategic minimizations of
variation orders, All involved parties should plan adequately before works start on site,
Supervise the works with an experienced and dedicated supervisor, Spend adequate time on pre-
tender planning phases, Clients should provide a clear brief of the scope of works ,and Carryout
detail site investigation such as detail soil investigation and others Were the top five most
frequent impacts of variation orders according to the responses of the clients.
The contractor response result the top five most frequent suggest strategic minimizations of
variation orders were Supervise the works with an experienced and dedicated supervisor, All
involved parties should plan adequately before works start on site, Spend adequate time on pre-
tender planning phases, Complete the drawing at tender stage and Carryout detail site
investigation such as detail soil investigation and others.
According to the responses of the consultant, Supervise the works with an experienced and
dedicated supervisor, Carryout detail site investigation such as detail soil investigation and
others, Complete the drawing at tender stage, Spend adequate time on pre-tender planning
phases, and all involved parties should plan adequately before works start on site.
From the interview and questionnaire responses received, it was therefore conclude that the
following best five strategies were recommended to minimize variation order on public building
projects were: Spend adequate time on pre-tender planning phases, Supervise the works with an
experienced and dedicated supervisor All involved parties should plan adequately before works
start on site, Carryout detail site investigation such as detail soil investigation and others
,Complete the drawing at tender stage .
The above strategic minimizations were the higher ranked from the interview and overall
questionnaire respondents.

5.2 Recommendation
Based on these finding, the owner is the most predominant of variation order causes due to
the unclear briefing of the Delay payment. Moreover, design errors and omissions cannot be
completely avoided but can be reduced and decrease its negative impact be reduced; especially if
designers assessed their workloads before committing themselves to new contracts. They should
ensure enough time and experienced human resources to deliver a sound design within the
proposed time frames. Among others, recommendations to reduce the occurrence of var iation
orders were stated as follows:
 The impacts of variation order on building construction projects can be reduced by giving
adequate time on pre-tender planning phases.
 Between the parties (Client, contractor, consultant and other local government bodies)
should have enhance communication to reduce the impacts of variation order on building
construction projects.
 The clients better to hire an experienced and dedicated supervisor to supervise each work
properly through the building construction period.
 The consultants should complete the drawing at tender time and also the clients should
fulfill their requirements on those drawings to reduce variations during the constructions
and to reduce their impacts.
 All involved parties such as clients, contractors, consultants, and other local government
bodies should plan adequately before the works start on site.
 Clients should ensure that the design /specification fall within the approved budget.
 Consultant should give sufficient time for planning and design phase, this will assist in
minimizing variation order due design changes at construction stage.
 Get accurate information and research with regard to procurement procedure, material
and plant.

5.3 Challenges during our theses preparation

One of the challenges faced during this research project was to get respondents to participate
in the study.
 The stakeholder were not responsibility to accept questionnaire
 During the preparation of our thesis we had financial problems those finances were for
print expense, transportation expenses to distribute and accept the questionnaire.
 The respondents fill the questionnaire randomly or carelessly
 Debre Berhan town building offices were not willing to give the current building
construction list or current data.

Reference
 Arain F.M. and Pheng L.S. (2005): The Potential Effects of Variation Orders on
Institutional Building Projects, Journal of Facilities, Vol 23 No 11/12, 2005, pp 496-510
 Arain, F.M. & Pheng, L.S. 2005b, 'How Design Consultants Perceive Causes of Variation
Orders for Institutional Buildings in Singapore', Architectural Engineering and Design
Management, vol. 1, no. 3, pp 181-196
 Arain, F.M. & Pheng, L.S. 2006, 'Developers' views of potential causes of variation orders
for institutional buildings in Singapore', Architectural Science Review, vol. 49, no. 1, pp 59
74
 Impact of Change Orders in Construction Sector in The West Bank
 Assessing the impact of variation orders on public building projects in Addis Ababa by
andualem indris yadeta
 causes and effect of delay on project construction delivery time
 CII. The impact of changes on construction cost and schedule, Construction Industry
Institute, University of Texas, Austin, USA, 1990.
 Chan, A. P., & Yeong, C. M. (1995). A comparison of strategies for reducing variations.
 Construction Management and Economics, 13(6), 467-473
 Dr. Simon Eigbe. Int. Journal of Engineering Research and Application www.ijera.com
ISSN : 2248-9622, Vol. 6, Issue 10, ( Part -2) October 2016, pp.34-48
 Ndihokubwayo, R. (2008). An analysis of the impact of variation orders on project
performance.
 Factors Causing Variation Orders in Construction Projects in Gaza Strip (Case study: Qatar
Projects)
 Gunduz, M. (2002). Change orders impact assessment for labor intensive construction.
 Investigation on the causes of variation orders in the construction of building project – a
study in the state of selangor, Malaysia
 To cite this article: Adnan Enshassi , Faisal Arain & Sadi Al‐Raee (2010) Causes of
variation orders in construction projects in the Gaza Strip, Journal of Civil Engineering and
Management, 16:4, 540-551

Appendices
Questionnaire
Dear Respondent,
Thank you for volunteering your valuable time and experience in answering this
questionnaire that will be a main component on my research: “Impact of variation order on
building construction Project in Debre Berhan town ". Before proceeding to fill the
questionnaire, may you please provide the following information related to yourself, your
company, and permission for disclosure/non-disclosure of your personal information for the sole
purpose of this questionnaire?
SECTION A: ORGANIZATION AND RESPONDENT’S PROFILE
1. Name of the respondent: ______________________
2. Your Company: _________________________________________________
3. Companies Address: _______________________________________________
5. Which of the following best describes your company?
Company Tick one
Client
Consultant
Contractor
Other
(Please Put Tick or Yes in front of the selected cell for the following items)
6. Category:_____ grade:
7. Education back ground:

Bachelor degree Doctoral Degree
Master degree Other (Kindly Specify)
8. Number of years of work experience:
Less than 5 year‟s 10-15 years
5-10 year‟s 15-20 years
More than 20 years

9. Position:
Executives Department Heads
Project Managers Architect/ Engineer
other (Kindly specify)
10. Projects on which you have the most experience can be categorized as:
Residential Institutional Projects
Commercial Projects Industrial
Infrastructure Projects
SECTION B: CAUSES OF VARIATION ORDERS
Using a scale of 1 to 5, rate the following according to their importance of occurrence as to be
ranked according to their significances in the boxes bellow. Important (Scale of 1 to 5)
1=Never 3=some time
2= Seldom 4=Often
5=Always
1. The following are examples of causes of variation orders; please indicate the degree of
importance for each cause according to the scale of 1 to 5 from your opinion as for the Impact of
variation order on building construction Project in Debre Berhan town.
NO Causes of variation order Important Scale 1 To 5
1 2 3 4 5
1 Change of plans or scope by client
2 Change of construction time by client
3 Client financial problem
4 Change of materials or procedure
5 Change in specification by client
6 Change in design by consultant
7 Change in specification by consultant
8 Errors and omissions in design
9 Technology change
10 Lack of coordination

11 Design complexity
12 Inadequate working drawings details
13 Consultant lack of judgment or experience
14 Consultant lack of knowledge of available materials and
equipment;
15 Consultant lack of required data
16 Design discrepancies
17 Design non-compliance with statutory/government
regulation
18 Design non-compliance with client requirements
19 Unavailability or lack of equipment
20 Shortage of skilled labor
21 Contractor‟s financial problem
22 Unfamiliarity with local environment
23 Absence of specialized construction manager
24 Poor procurement process
25 Lack of communication
26 Contractor‟s lack of experience and judgment
27 Lack of strategic planning
28 Weather conditions
29 Safety conditions
30 Changes in government regulations
31 Changes in economic conditions
32 Socio-cultural factors
33 Unforeseen problems

SECTION C: IMPACT OF VARIATION ORDERS

Please indicate your level of agreement with the following questions on a scale 1 to 5.
Indicator: 1 = No impact 3 = Medium impact
2 = Low impact 4 = High impact
5 = Very high impact
2. From your experience, what was the impact of variation orders on construction projects?
NO Impact of Variation Orders Important Scale 1 To 5
1 2 3 4 5
1 Cost overruns
2 Time overruns
3 Professional relationships
4 Increases overhead expenses
5 Delay in payment
6 Procurement delay
7 Dispute among professionals
8 Poor safety condition
9 Progress effected without any delay
10 Completion schedule delay
11 Additional payment for contractor
NO If any other impact of variation orders, Important Scale 1 To 5
please specify 1 2 3 4 5
12
13
SECTION D: RECOMMENDATIONS TO MINIMIZE VARIATION ORDERS
Please indicate your level of agreement with the following questions on a scale 1 to 5.
Indicator: 1 = Unimportant 3 = Important
2 = Less important 4 = Very important
5 = Very high important

3. Following are suggested strategies or recommendations used to minimize variation orders.

From your experience, what is the best strategy action can be taken to minimize variation orders
on building projects?
NO Recommended Strategic actions to minimize variation Important Scale 1 To 5
orders 1 2 3 4 5
1 Get accurate information and research with regard to
2 Carryout detail site investigation such as detail soil
3 Supervise the works with an experienced and dedicated
supervisor
4 The consultant should ensure that the design or
specification fall within the approved budget
5 Complete the drawing at tender stage
6 All parties should forecast unpredictable conditions
7 Clients should provide a clear brief of the scope of works
8 All involved parties should plan adequately before works
start on site
9 Enhance communication between the parties
10 The consultant should coordinate crossly at design stages.
11 Spend adequate time on pre-tender planning phases
12 The consultant should produce a concluding and contract
document
13 Once the tender is awarded, make no changes to the
specification
NO If you have any other recommendations to minimize Important Scale 1 To 5
variation orders, please specify 1 2 3 4 5
14
15


Sec 4 Group 4.

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sec 4 Group 4.

Uploaded by

Copyright:

Available Formats

THE IMPACT OF VARIATION ORDER ON BUILDING CONSTRUCTION PROJECTS 2009E.

DBU University Department of construction Technology and Management Page i

DBU University Department of construction Technology and Management Page ii

DBU University Department of construction Technology and Management Page iii

3.2 Methodological approaches ..................................................................................................... 18

5.1.2 Impact of variation orders on building projects ...................................................................................................43

Table 2-1 impacts of variation orders ........................................................................................... 11

DBU University Department of construction Technology and Management Page v

Figure 4.1 Overall Top Five Important Causes……………………………………………..32

DBU University Department of construction Technology and Management Page vi

CII Construction Industry Institute

DBU University Department of construction Technology and Management Page vii

DBU University Department of construction Technology and Management Page viii

DBU University Department of construction Technology and Management Page 1

1.2. Back ground of the Study

DBU University Department of construction Technology and Management Page 2

1.3 Problem Statement

1.5. Significance of the Research

DBU University Department of construction Technology and Management Page 3

1. 6. Scope of the study

DBU University Department of construction Technology and Management Page 4

2.2 Definition of Variation

DBU University Department of construction Technology and Management Page 5

2.3 Nature and Types of Variation Orders

2.3.1 Beneficial variation orders

DBU University Department of construction Technology and Management Page 6

2.3.2 Detrimental variation orders

2.4 Causes of variation orders

DBU University Department of construction Technology and Management Page 7

2.4.1 Client related changes

DBU University Department of construction Technology and Management Page 8

2.4.2 Contractor related changes

2.4.3 Consultant related changes

DBU University Department of construction Technology and Management Page 9

 Design non-compliance with client requirements

2.4.4 Other changes

2.6 impacts of variation orders on building projects

DBU University Department of construction Technology and Management Page 10

DBU University Department of construction Technology and Management Page 11

 Time and material charges related to immediately affected tasks;

DBU University Department of construction Technology and Management Page 12

DBU University Department of construction Technology and Management Page 13

The safety conditions in construction projects may be affected by variations (O‟Brien,

I. Progress is affected but without any delay

DBU University Department of construction Technology and Management Page 14

2.7 Recommended Strategies to Minimize Variation Orders

DBU University Department of construction Technology and Management Page 15

NO Recommended Strategic actions to minimize variation orders

Table 2-2impacts of variation orders

DBU University Department of construction Technology and Management Page 16

DBU University Department of construction Technology and Management Page 17

3.2 Methodological approaches

3.2.1 Qualitative method

3.2.2 Quantitative methods

3.3 Secondary data

3.3.1 Preliminary literature study

DBU University Department of construction Technology and Management Page 18

3.3.2 Full literature study

3.4 Primary data

DBU University Department of construction Technology and Management Page 19

3.5 Method of Data Analysis

DBU University Department of construction Technology and Management Page 20