VARIATION CLAIM IN THE CONSTRUCTION

INDUSTRY
Presented by Adelayo Abass
NIQS JULY MONTLY MEETING

Protect your claim with the right documentation

 VARIATION CLAIMS
Variation claim: request for additional time, cost, or
changes in the scope of work due to modifications or
unforeseen circumstances during a construction
project.
Variation claims can impact project profitability,
timelines, stakeholder relationships, and overall
project success.
Costruction projects often encounter changes which
can lead to disputes and claims if not well managed.
The claimant seeks compensation from client
We Look at the causes, consequences & management
 IMPORTANCE OF MANAGING VARIATION CLAIMS

Effectively managing variation claims will;

. Control costs . Satisfy Client
. Manage project timelines
. Mitigate risks . Maintain good
reputation and foster continuous improvement.
By prioritizing effective variation claim
management, stakeholders can enhance project
outcomes and achieve long-term success in the
industry.
 COMMON CAUSES OF VARIATION CLAIMS
• Design Changes; preference, unforseen issues
discovered during construction.
• Site Conditions; soil quality, buried utilities etc
• Incomplete or Inaccurate Documentation;
• Errors in Quantity Takeoff/Description
• Unforeseen Events and Force Majeure
• Changes in Statutory or Regulatory
Requirements.
• Availability of Materials or Labor.
 EFFECT OF VARIATION CLAIM
• Financial Implications: Variation claims can
impact project costs and profitability.
• Time Delays: additional time to plan, redesign,
or rework.
• Contractual Obligations: mismanage variation
leads to conflicts/dispute.
• Client Satisfaction/damaged relationship:
Properly addressing and managing variation
claims contributes to client satisfaction and
otherwise can strain stakeholders relationship.
 MANAGING VARITION CLAIMS
. Contractual Clarity: proceed with the process
as defined by the contract.
. Early Resolution
• Proactive Communication: Encourage open/prompt
communication among all project stakeholders.
• Documentation: keep detailed records of variation
requests, approvals & associated costs.
• Negotiation and Mediation: Explore alternative
dispute resolution methods to resolve claims before
resorting to litigation.
• Explore the use of BIM
• Learn from past projects
 RESULT OF EFFECTIVE MANAGEMENT OF VARIATION
CLAIM
• Cost Control: promptly identifying, documenting and
addressing variations will aid accurate assessment of
cost and take control actions.
• Time Management: develop appropriate mitigation
strategies, and keep the project on track.
• Risk Mitigation: prompt action helps mitigate risks
and prevent conflicts that can lead to disputes and
associated costs.
• Client Satisfaction: project teams show their
responsiveness, professionalism, and ability to adapt
to changes theregy ying the client
 RESULT OF EFFECTIVE MANAGEMENT OF VARIATION
CLAIM

• Lessons Learned and Continuous Improvement:

Variation claims provide valuable opportunities for
learning and improving project management
practices.
• Overall effectively managing variation claims is
critical for successful project delivery in the
construction industry. By prioritizing effective
variation claim management, stakeholders can
enhance project outcomes and achieve long-term
success in the industry.
 CASE STUDY
. Causes; incomplete drawings, clients
changes/modfication, material unavalability,
inefficient site investigation, disparities in
drawings, improper administration.
• Effect; changed in cost by 30%, extention of
time, ambiguity in contract documents, illegal
deductions,
• Management; good documentation/
communication.
• Lesson learnt; ambiguity should be addressed
as soon as spotted
 BEST PRACTICES FOR VARIATION CLAIM
. Establish clear contract provisions for managing
variations.
• Implement robust change management processes.
• Communicate openly and promptly with all project
stakeholders.
• Maintain detailed documentation throughout the
project.
• Seek early resolution through negotiation or
mediation.
• Learn from past projects and continuously improve
claim management practices.
 IMPORTANT NOTE
• Remember that variation claims are subject to
the terms and conditions of the contract, so it
is important to review the specific contract
documents , consult legal and construction
professionals for accurate advice and guidance
regarding claims in the construction industry.

• It is also worth mentioning that we have ADR

Organization that we can consult for
professional advise.
 IMPORTANT NOTE IN THE CONDITIONS OF
CONTRACTS
. Variation must be approved before its done
• Employer can instruct at any time during the
contract period.
• Contractor must comply with a variation
instruction and must be paid.
• The value of a variation is to be agreed.
• If the variation results in a delay to the
completion of the works, the contractor is
entitled to an extension of time.
 CONCLUSION
Variation claims are requests for compensation or
adjustments due to changes or unforeseen
circumstances during a project. Some common types of
variation claims include scope changes, delays and
disruptions, quantity variations, differing site
conditions, design errors or omissions, and product
substitutions.

These claims seek to recover additional costs incurred

or address modifications required beyond the original
contract specifications. It's important to consult legal
and construction professionals for accurate advice
specific to your project and contract.
THANK YOU FOR YOUR TIME

Q&A