Analysis of causes and impact of variation order on educational building projects

Abstract

Purpose Construction process is complex and traditionally fragmented; thus, it is almost impossible to have a project completed without changes to the original plan or the construction process. The purpose of this study is to identify and examine the causes of variation orders, ascertain their effects and establish the cost and time performance implication as a result of variation orders. Design/methodology/approach This study obtained information from 90 construction stakeholders on 30 completed educational building projects to ascertain the causes and effects of variation orders on project delivery using questionnaire survey. In addition to this, a pro forma document was designed to obtain the project characteristics, cost and time data from these 30 completed educational building projects. Factor analysis was used to categorise the causes of variation orders, while severity index was used to examine their effects on project delivery. The hypothesised statement was tested using paired t-statistics to examine whether a statistically significant difference existed between variation orders, cost and time performance of the projects. Findings The study identified 13 main factors as causes of variation orders and the results revealed that the most frequent effects of variations were increase in construction costs, time, client dissatisfaction, increase construction project rework and demolition and project abandonment. The results also showed that variation orders had significant effects on both cost and scheduled performance of the educational building projects with average cost and time escalation of 33.95 and 29.45 per cent of the original project cost and time, respectively, for the entire projects studied, while average cost implication of variation orders is 23.79 per cent. Practical implications The findings in this study will be of assistance to government agencies and management of public works in higher institutions of learning in managing variations in construction projects. The study will also add to the current literature on the impact of variation orders on educational building projects in developing countries. Finally, it will create the much-needed awareness on the severity and implication of change or variation orders on project delivery. Originality/value The study identified and examined the causes of variation orders, ascertained their effects and established the cost and time effects of the causes of variation order on project performance. This will assist project initiators, contractors, consultants and other stakeholders to fully appreciate and understand the significant effects of variation orders on project performance.

Key Causes of Variation Orders in Public Construction Projects in South-South Zone of Nigeria: An Explanatory Factor Analysis

“…The Component is therefore labelled "contractor/construction-related causes". The findings also agree with that of Hseih et al (2004), who finds similar issues, under this component as construction (or project peculiarities) related factors while Alnuami et al (2010); Enshassi et al (2010); Oyewobi et al (2016) classify it as contractor-related.…”

“…On this basis the component is thus labelled, "consultant-related" causes of variation order. The result is in line with the findings of Arain & Al-Raee (2010); Oyewobi et al (2016) who group the concerned issues in similar studies as consultantrelated causes of variation order. Component 4 is loaded with three variables strongly addressing organizational related issues both within and outside project organization.…”

The Causes of Variation Orders and Their Effects on Cost and Time of Projects in Sulaimani Governorate

“…Otherwise, increase in project cost to 15% from original contract value. Oyewobi et al [19] stated that change orders have a direct impact on both schedule and cost performance in projects in Nigeria, with average time and cost escalation of 29.45 and 33.95percent, respectively, from the original project agreement. Dickson et al [20] used a questionnaire to evaluate the impact of variations on projects in Kenya.…”

Methods of Valuing Construction Variation in Lump Sum Contract from the Public Client’s Perspective

“…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 [6].…”

“…Variation order is detrimental when it negatively affects the client's value or project performance [5,2]. Hence, a client who is experiencing financial difficulties may require the replacement of quality, standard and expensive materials to sub-standard and cheap materials [6].…”