Instructing a Variation So It Stays Priced and Provable

The sequence that takes a change from an idea to an agreed, recorded variation, and the controls that stop instructions being issued by conversation.

A variation becomes expensive at the point it is instructed informally. The work proceeds, the cost is unknown, the programme effect is unrecorded and the argument happens months later when nobody remembers what was said. The process below takes two extra days and converts every change into a priced, dated, agreed item.

Before stage one

You need three things in place before the first change arrives: a named person with authority to instruct, a stated value threshold above which approval must be escalated, and a contract that contains rates for valuing change. Without the rates you negotiate every time; without the authority rule you discover instructions nobody sanctioned. Contract procedures for instructing change differ between forms and are updated periodically, so extract your own clause into a one page procedure.

• Name the single person authorised to issue instructions and circulate that name to both teams.
• Set the value threshold that requires escalation and the approval route above it.
• Confirm the contract contains labour, plant and percentage rates for building new rates.
• Open a variation register before the first instruction, not after the tenth.
• Agree with the contractor how a quotation for a proposed change will be requested and responded to.

Stage 1: Capture the change request and classify it

Record every proposed change in one register with a reference, a date, the originator and a one line description. Then classify it: a client requirement change, a design development item, a correction of an error, a response to a site condition or a statutory requirement. The classification matters because it determines who pays and whether it is a variation at all. A design development item that should always have been there is not a variation, and saying so at this stage is far cheaper than conceding it later.

• Deliverable: A dated entry in the change register with a classification and an originator.
• Owner: The contract administrator.
• Approval gate: No change proceeds to pricing without a classification.

Stage 2: Test whether the change is necessary at all

For each request, establish what happens if it is not made. A change that improves something nobody will notice, at a cost that comes out of the contingency, deserves a short conversation rather than an instruction. Changes requested after the relevant work has been procured or started cost multiples of the same change requested earlier, so quantify the timing penalty when you present the option to the decision maker.

• Deliverable: A one paragraph assessment stating the reason, the consequence of not proceeding and the timing penalty.
• Owner: The project lead.
• Approval gate: The decision maker sees the cost of the change and the cost of the delay in deciding.

Stage 3: Request a quotation before instructing, where time allows

Ask the contractor for a quotation covering the cost of the change, the effect on the programme and any effect on other work. Requiring the programme effect in the quotation is the critical discipline: it forces the contractor to state the time consequence while the change is still optional, rather than claiming it later. Set a short response period and state that the quotation must identify any assumption it relies on.

• Deliverable: A written quotation with a price, a programme statement and listed assumptions.
• Owner: The contractor commercial team, requested by the administrator.
• Approval gate: The quotation addresses time as well as money, or it is returned.

Stage 4: Check the quotation against the valuation hierarchy

Test whether the price has been built using the correct basis: a contract rate where one exists, an adjusted rate where conditions differ, a fair new rate where nothing comparable exists. Check the percentage additions against the contract. Check that preliminaries or overhead are not being claimed twice, once inside a rate and once as a separate line. This review usually takes an hour and is where most of the value of the whole process sits.

• Deliverable: A reviewed quotation with a recommendation and any adjustment explained.
• Owner: The quantity surveyor.
• Approval gate: The recommended value cites the basis of valuation applied.

Stage 5: Obtain the approval the threshold requires

Take the recommendation to whoever the threshold requires, with the cumulative variation position alongside it. Presenting a single change in isolation hides the pattern, and the pattern is what consumes a contingency. A monthly approval pack showing instructed to date, forecast and remaining contingency keeps the decision honest and prevents the familiar surprise at month fifteen.

• Deliverable: An approval record naming the approver, the date and the approved value.
• Owner: The budget holder.
• Approval gate: Cumulative variation value and remaining contingency are shown with every individual approval.

Stage 6: Issue the instruction in the contractual form

Issue the instruction in writing, in the form the contract requires, with a reference number, the description, the drawings or documents that define it, the agreed value or the basis on which it will be valued, and the agreed programme effect or a statement that time is reserved. An instruction that omits the valuation basis invites a later claim; one that omits the time position invites a later extension of time application.

• Deliverable: A numbered written instruction containing value and time positions.
• Owner: The person named in the contract as having authority.
• Approval gate: The instruction is in the contractual form and signed by the authorised person.

Stage 7: Close the loop in the register, the valuation and the programme

Update the variation register to agreed status, include the value in the next valuation, and ensure the programme is revised if a time effect was accepted. Each of those three updates is often done by a different person, which is why variations commonly appear in the cost report but never in the programme. A monthly cross check between register, valuation and programme catches the mismatch while it is still small.

• Deliverable: A register, a valuation and a programme that agree on every instructed change.
• Owner: The commercial manager.
• Approval gate: Monthly reconciliation shows no variation present in one document and absent from another.

Handovers between stages

The handover that creates most disputes is from the site conversation to the paperwork. An engineer who tells a foreman to move a wall has instructed a variation in substance, and if it never reaches the register the work is built, the cost appears somewhere unexplained and the time effect is unrecorded. The control is cultural as much as procedural: every member of the supervising team must know that only one named person instructs, and that anything else is a request to be logged. Say it at mobilisation and repeat it when the first informal instruction appears.

How you know it is finished

The process is working when the variation register, the cost report and the programme tell the same story, when no instructed work is proceeding without a value or a stated basis, and when the contractor is not holding a list of alleged verbal instructions. Review the register at every monthly meeting and count the items in dispute: a register with a handful of open items is healthy, while one with dozens is a final account dispute already in progress.

Domira builds and supervises projects across Saudi Arabia, and the commercial discipline above is how its projects stay inside their budget and their programme. Send the drawings, the contract or the site and Domira will tell you where the risk actually sits.