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

Abstract

A valuation of variation orders has become a daily task on large construction contracts. It is a norm where one of the contracting parties disagrees about the valuation of work done. Therefore, the valuation of variation orders has become one of the main causes of conflicts and disputes in construction management. The aims of study to determine the best practicing method in valuing a variation order for lump sum contract and identify the main related causes of variation project. The mixed method (interview and case study) of research was adopted in the collection of necessary data. Interview was conducted from 6 construction expert (clients) were analyzed. 6 case study building projects were selected by targeting sampling technique and used as the source of data for this study. The data were analysed with frequencies, sums and percentages. The study found that the client needs, lack of coordination during design and omission in design are the main causes of variation. An analysis of data indicated that used schedule of rate, fair market rate, daywork rate and negotiation are the four most famous method practicing in valuing a variation order in lump sum contract but its rely on the circumstances and the character of works.