Professional Documents
Culture Documents
MAY,2007
ii
Final Pr
Signature
..
Name
Date
..
fulfillment
iii
Specially Dedicated To
My Parents
My Beloved Mother
You have done all the best for my live
Beloved Husband
Ahmad Fairuz B. Dato Ahmad Shamli
Thank you for your love and support
My Children
Youre the heart of my life
iv
ACKNOWLEDGEMENT
With high gratitude to Allah S.W.T. who gave me the ideas and physical
strength in preparing this final project. I wish to express my gratitude to the persons
and all parties who responded to the survey and also offered their invaluable
contributions in carrying out this final project.
First of all, I would like to express my appreciation to my Supervisor for his
guidance throughout the preparation of this thesis.
Special thanks to those who agreed to be interviewed, formally and informally,
because gave me the benefit of their knowledge, views and experience. I would like
also to extend my sincere and deepest gratitude to all my friends who have helped me
directly or indirectly.
Finally, I would like to express my deepest love and appreciation to my family
especially to my husband for his support. Thank you for all understanding given to me
when I really need it. I am hoping this thesis will be a reward for all efforts of every
contributing individual. Thank you.
ABSTRACT
vi
ABSTRAK
perubahan
keja
telah
dikenalpasti;
masalah-masalah
yang
mempengaruhi perubahan kerja dan kesan nya; dan akhir sekali tindakan yang boleh
diambil bagi mengurangkan perubahan kerja
demikian, kesimpulan dari kajian ini terdapat strategi tindakan boleh dilakukan bagi
mengurangkan perubahan kerja bermula dari peringkat awal perancangan hingga ke
peringkat pembinaan.
vii
TABLE OF CONTENTS
CHAPTER
TITLE
PAGES
DECLARATION
ii
DEDICATION
iii
ACKNOWLEDGEMENT
iv
ABSTRACT
ABSTRAK
vi
TABLE OF CONTENTS
vii
LIST OF TABLES
xii
LIST OF FIGURES
xiii
LIST OF ABBREVIATIONS
xiv
INTRODUCTION
1.1
Introduction
1.2
Problem Statement
1.3
1.4
1.5
Research Methodology
1.6
Summary
Intoduction
2.2
Definition
2.3
Types Of Variation
10
viii
2.4
10
11
11
2.4.1
Site Condition
12
2.4.2
Design
12
2.4.3
Client Requirement
13
2.4.4
13
2.4.5
14
Statutory Requirement
2.5
3
2.4.6
Poor Management
14
2.4.7
15
Summary
15
Introduction
17
3.2
17
Pre-Contract Stage
3.3
3.2.1
Inception Stage
18
3.2.2
Feasibility Study
19
3.2.3
Outline Proposal
20
3.2.4
Scheme Design
21
3.2.5
Detail Design
21
3.2.6
Production Information
22
3.2.7
Bills Of Quantities
22
3.2.8
Tender Action
23
24
3.3.1
24
3.3.2
25
3.3.3
25
3.3.4
Design Changes
26
3.3.5
Communication
26
ix
3.4
3.5
4
3.3.6
Client
27
3.3.7
Consultant
27
3.3.8
Contractor
28
28
3.4.1 Delays
28
3.4.2
Cost
29
29
30
30
3.4.3
Quality of Works
30
3.4.4
31
3.4.5
Inconveniences
31
3.4.6
Unsatisfied
32
Summary
32
Introduction
33
4.2
33
4.2.1
34
4.2.2
Detailing Of Design
34
4.2.3
35
4.2.4
35
4.2.5
36
4.2.6
36
4.3
4.4
37
4.3.1
Contractors Efficiency
37
4.3.2
37
38
38
4.3.5
38
Summary
39
RESEARCH METHODOLOGY
5.1
Introduction
40
5.2
41
5.3
42
5.4
Stage 3 : Recommendation
43
5.5
Summary
43
Introduction
44
6.2
Case Study 1
45
6.3
Case Study 2
50
6.4
Case Study 3
55
6.5
60
6.6
66
6.7
Summary
75
Introduction
76
7.2
Conclusion
76
7.3
Recommendation
82
REFERENCES
83
xi
LIST OF TABLES
TABLE
TITLE
PAGE
6.1
46
6.2
51
6.3
56
6.4
Types of variations
60
6.5
61
6.6
62
6.7
63
6.8
64
6.9
66
6.10
68
6.11
71
6.12
71
6.13
72
6.14
Delay
72
xii
LIST OF FIGURES
FIGURE
TITLE
PAGE
1.1
3.1
18
6.1
61
6.2
64
6.3
65
xiii
LIST OF ABBREVIATIONS
S.O
Superintending Officer
IEM.CE 1/89
V.O
Variation Order
BQ
Bills of Quantities
M & E-
TNB -
JBA
JKR
CHAPTER 1
INTRODUCTION
1.1
Introduction
Today, small projects can be just as important if not more important than the
larger projects. When unforeseen situations occur on site, it is important to first
understand the situation and come up with suitable solutions and forecasts the
probable consequences. One of the occurrences that make projects less profitable is
the variation in the original works, leading to re-planning of the ongoing work. As
clients are always known for their tall demands, they sometimes change their minds
by varying the works while in progress. Changes are usually the major factors causing
the delay on projects. The impact due to changes has been described as the adverse
effect upon the unchanged work due to changes in the contract.
Even though there are provisions on variation orders in a building contract, the
variations works sometimes did not satisfy both of parties who felt disappointed to
carry on the works. It will give impact on the cost of the project extend the
completion period and it will bring inconveniences to all the parties involved in
construction industry, which are client, consultants and also contractor. Besides that it
also brings inconvenience for the end user. No matter how much effort to reduce the
variation order in construction industry, it still happens and the final accounts
remained unresolved after the building was occupied.
For this, some strategies are needed to anticipate starting from the planning
stage, so that as the project commences and programmed on site, they will be no
variations or at least they can be minimized. Therefore, all parties involved should
cooperate to assure that the efficiency of construction and thus will minimize the
variation orders in construction industry.
1.2
Problem Statement
Many program for development are being carried out rapidly for Lembaga
Kemajuan Tanah(FELDA) to develop FELDA land. Therefore 5 years back many of
building and infrastructure works been carried out which awarding the project to the
experience and class A contractor but the problem of variation work is still occurring
while construction in progress. Varies order from client and authority requirement
makes the variations increased easily. Changes in the contract and misinterpreted in
document contract will caused of additional cost and the impact of this variation and
will impact on the completion of project.
Most of the variation occurs when major changesT in the contract during
construction and additional works. Variation can also occur when unexpected
3
condition such as climate changes which can causes damages project site as example
flooded during construction in progress. While unforeseen condition and due to lack
of supervision and poor in managing and planning the project can also causes of
variation.
1.3
. To achieve the aim, several objectives are defined, they are as follows:-
1)
2)
3)
1.4
The scope of this study is focused Research starts from Pre-Contract practice
on managing the design development process in construction. Study on the strategy
action to be taken starting from planning stage until the Post Contract stage and its
effectiveness in minimize the variations. The area of work of the study focused on the
building construction works of Lembaga Kemajuan Tanah Persekutuan (FELDA)
project and also interviews from professionals who are relevant to the topics.
4
1.5
Research Methodology
(i)
The first stage include literature review which based on the primary
data collected through reading and searching from related books,
magazines, articles, web site and others.
(ii)
(iii)
Literature review
First Stage
Collection of Data
Case Study
Second Stage
Third Stage
Interview
Analysis of Data
(based on qualitative method)
6
1.6
Summary
CHAPTER 2
2.1
Introduction
This chapter identifies the types and the factors that influence the variation
order, establish the definition of variation and classification of variation from the
literature review. The factors that influence the variation order to be discussed in
which related from the pre contract stage until construction stage.
2.2
Definition
In most form of contract used today for building work provision must be made
for possible variations. At the same time when tenders are invited the employer and
his architect and engineer should have crystallized all their ideas into a set of contract
documents.
According Standard Form Of Contract (IEM.CE 1/89, clause 23(a)), state that
the term variation means increase or decrease the quantity of any works include in
the contract; omit any such work; change the character or quality or kind of any such
work; change the levels line position and dimensions of any part of the works; execute
additional works of any kind necessary for the completion of the works.
Variation can be classified into two categories, which are active variations and
passive variations (Hj. Hashim Sikan, 2003). Active variations come indirectly as a
result of the issue of instructions. So much the instruction it become a norm that there
is no variation without instruction. Instruction here refers to those instructions issued
by the contract administrator for example Superintending Officers (S.O) instruction
in the standard form of contract(PWD Form 203A and IEM.CE 1/89).
Another aspect of variation deals with statutory regulations (clause 11(d)
PWD Form 203A, and IEM.CE 1/89) requires the contractor to inform the S.O in
writing of any change or amendment in statutory regulation and bye-laws taking
effect after the Date of Tender which necessitated any variation to the works and
apply for and S.Os instruction before the S.O could issue the instruction.
The passive variation could be accepted as those that do not require the
instructions to be issued directly to the contractor. For example re-measurement and
valuation of those quantities of the work, which are stated as provisional in the bills
of quantity. Other than that the variations also comes in the form of the adjustment of
items having Prime Cost or Provisional Sums in the contract.
The variation work of these items shall be prepared and agreed by the
contractor and the client in which to facilitate the finalization of accounts in the
contract. After the both parties agreed with items and the rates that involve in
variation works, then it should be prepared in the final account accordingly to the
Variation Order format.
2.3
TYPES OF VARIATION
According to Ir Harbans Singh K.S (2002), generally there are three types of
variations. The types of variation can be classified according to their criteria, which
are as list as follows:
(i)
(ii)
(iii)
10
Employer is a person on behalf of the users, future occupants, and etc., while
the contractor can make change on his own volition or behalf of sub-contractors,
suppliers, etc. Nominated sub-contractors/ suppliers are in relation to their respective
sub-contract; and contract administrator; on his own volition, on behalf of the
employer, the designers, statutory bodies, third parties and etc.
It is an undeniable fact that the bulk of the variations are initiated by the
employer. The principal reasons for the employer to initiate variations are changes in
the employers requirements post contract award, for example owing to a rethinking
of the needs, change in the nature and use of the anticipated or future utilization of the
finished works. Besides that, the changes are also in review or reassessment of the
design by the designers due to issues such as safety, build ability, and correction of
deficiencies or errors. While the contract administrator with the power is then
implemented the provision of the contract unless the employer has retained such
powers under the contract.
2.3.2
The nature of the variation means changes according to the nature of the work
itself. This means it not only changes to the work or matters appertaining to the work
in accordance with the provisions of the contract, but also changes in the contract
11
condition itself. It is includes addition of the work, omission and also combination of
both.
2.3.3
2.4
There are many factors that influenced the variations. It may come at the precontract stage and post-contract stage. The factors that influence the variation are due
to the site condition; any design changes; clients requirement; change of end users;
discrepancies between the works and statutory requirement; poor management; and
request by the contractor.
12
2.4.1
Site Condition
The real conditions are not shown in the drawings and specifications and
cannot be determined during preliminary investigation and therefore it is beyond
expectation. If the Contractor finds any difference in soil condition such as old
underground structure, hole underground, etc, he must inform to the S.O immediately
in writing. This enables the S.O to give the appropriate instruction as described in the
Form of Contract, (clause 8(b) of PWD Form 203A and IEM.CE 1/89). This clause
provides the S.Os instruction, which is considered to be a variation for unforeseen
condition, and the Contractor is entitled to claim for the cost incurred and looses.
2.4.2
Design
Only when a site is chosen, it will continue with the design stage. In this stage
the clients brief must be clear. A sophisticated client will already have seen to this
stage. But a building employer may frequently be dissatisfied with the design of the
project, and the seriousness of allegation of bad design can range from the little to the
serious. Design problem may cause structural failure leading to personal injury or
even loss of life.
13
2.4.3
Client Requirement
A client is an owner of the building. Clients are divided into three categories
which are some clients have knowledge and experience in construction industry, have
money but not have experienced in construction field and have money and have a
little experienced in construction industry. The major factors that influenced the
instruction of variation made come from the client itself. The clients requirement
always changes time to time. Usually only when the building has been constructed
the client gets his sense of desire. The bulk of additional work is occasioned by
revisions in the requirements of the employer during the course of contract, (Ir
Harbans Singh K.S (2002)).
The changes clients requirement will affect the design. For example, an
employer may require lift for the project thus the design team should redesigned the
structure in order to fulfill the clients requirement. In this case, whether the
contractor should be entitled to compensation for loss of profit and loss of
productivity will depend on the variation work either cause a delay to the project as a
whole or any rate prevent the optimal deployment of plant and manpower resources
on the site. Other than that, there are some situations where the Client do not even
sure about his requirements and will follow the suggestion from the Architect. This
situation always happens during construction stage and even after construction stage.
Therefore it is sometimes very difficult to determine or to predict the needs of client
requirement.
2.4.4
Construction project is lengthy thus a construction project may take one or two
years time depending on the size of the construction. During that time, the
14
management of end user may have changed which will subsequently change the
function and size of a department. In this situation variation is unavoidable.
The discrepancies between the works and statutory requirement are one of the
factors of influenced of instruction of variations. There is a provision in the contract
that allows the Contractor to make variation to comply with the requirement of the
law and local authorities. In the case of compliance with a statutory requirement, there
is the possibility of the S.O securing a waiver and thus reducing the cost, or of a
measure of re-designing that achieves the same objective, (Turner, 1985)
2.4.6
Poor Management
Planning is concerned with only the future. It is obvious that the past becomes
history with the relentless passage of time. When construct a building, the
optimistically expect the project to be successful, with the perhaps only one or two
challenging surprises. It needs for proper planning and management of construction
can never be over emphasized. But poor management will caused the unsatisfied
result.
15
2.4.7
a)
b)
c)
2.5
Summary
There are three types of variation, from the literature research that have
been made by the author which were identified as identity of the initiator;
nature of the variation; and consequences/ effect of variation. The initiator was
identified such as employer, consultants, contractor and etc. The nature of
variation was identified as omission, addition and combination of both. Lastly
the consequences/effect of variation was identified as financial consideration
or time implication.
16
There are also many factors that influence the variation order, from the
literature research that have been made by the author. Some of the factor that
influence the variation order were identified as site condition; client
requirement;
discrepancies
design
changes;
between
the
changes
works
and
of
end
statutory
users
management;
requirement;
poor
CHAPTER 3
3.1
Introduction
3.2
18
Inception
Feasibility study
Outline proposals
Scheme design
Detail design
Production
information
Bills of quantities
Tender action
This development process can be summarized in the Figure 3.1 above. The
development outlines involve in pre-contract which involved in eight(8) stages, which
are described as follows :
3.2.1
Inception Stage
19
clients brief are often substantial. The main problem is identifying the clients needs
and then reconciling these against a background of financial, technological and
legislative constrains, the clients personal requirements, and also a number of design
variables including structural form, aesthetic and environment, (Ivor H. Seeley, 1982)
In inception stage, the architect will start his work after the client decides what
he wants. The architect will require as much information as possible from the client in
order to avoid variation order in the future. It is important that the client should keep
well informed of the various decisions as they are made. The basic details need by the
architect are the nature, size and function of the proposed building, the time and
financial limits relating to the project, information relating to ownership of the site,
boundaries, and other related matters, current position with regard to any planning
application, and other members of the design team to be appointed. The clients
requirement normally will reflect the design.
3.2.2
Feasibility Study
The main objective at this stage is to examine all the technical, functional and
financial aspects of the project and to advise the client as to its feasibility. The
feasibility study stage comes after the inception where the general outline of
requirement has been prepared. Normally the design team will meet and discuss to in
detail regarding the clients requirements and to make their recommendations thereon
for submission to the client and established the design brief.
The feasibility study will take into account a detail survey of the site and any
adjoining building and capacity of the various services including gas, water,
electricity, sewers and telephones. Consultation will take place with the Local
20
Authority and any relevant bodies. Any restriction on the use of the site must be
investigated and their effect on the proposed development determined.
The feasibility study normally will be based on the previous project with
similar uses and similar specification to investigate the requirement and facilities. The
quantity surveyor will calculate based on the findings and recommendations either the
proposed development is feasible to build or not.
The report must effectively assess the overall feasibility of the scheme having
regard to all relevant factors, so as to give the client all the information he needs to
make decision whether to proceed with the scheme or not. This report will be
supported by conceptual designs and estimates of cost.
3.2.3
Outline Proposal
21
The main purpose at this stage is to critically examine the wider issues of
appearance, method of construction, outline specification and the preparation of a cost
plan, showing the proposed distribution of costs over the elements or components of
the building. All the relevant design information is collated and a detailed report on
the design and full cost implications can be supplied to the client before the scheme
design is developed. The cost estimates will be provided by the quantity surveyor,
desirably incorporating both initial and future cost.
3.2.5
Detail Design
At this stage, the design will be in depth with the final decisions being taken in
respect of all individual components which together make up the complete building.
All members of the design team also will continue to work very closely together to
secure an integrated and efficient scheme. The various ideas from the various
professional will have contributed greatly to the final outcome.
As the design moves into greater detail and hopefully towards finality, cost
checks should be carried out to see that particular cost elements are not being
distorted, or that, if they are, the resulting redistribution within the budget is
acceptable, and if there are any changes in the design, it will result in abortive work
and almost certainly in additional cost.
22
3.2.6
Production Information
3.2.7
Bills Of Quantities
At this stage, the bill of quantities and all other tendering documentation are
finalized. It is important that the drawings, schedules, and specification particulars
should be checked and steps taken to ensure all the particulars are in correct.
If there are any discrepancies between the specification and drawings, then the
query list will submitted to the architect in order to the architects to clarify these
points and amend the documentation prior to tender stage.
23
3.2.8
Tender Action
Tendering procedures cover the various methods that may be used by the
client and his advisers to obtain offers. There are some procedures in obtaining the
tender which are open and selected tendering.
This open tendering procedure is to advertise through the press, inviting any
firm that wishes to do so to submit a tender. The advertisement will give outline
details of the type of work, the programmed and other key features. The open
tendering provides the longed for opening for some relatively unknown but capable
firm.
24
3.3
There are some problems arising when there is a variation work in the
construction. These problems might sometimes cannot be avoid but it can be managed
in order to reduce the problems occur in the future. The common problems that occur
in variation work can be categories as follows:-
3.3.1
25
3.3.2
If the S.O chooses to reject the work, the contractor must demolish the work at
his own cost. To avoid this problem, any instruction issued by the S.O must in
writing. If there is an instruction in verbal, the contractor must take an action to
confirm with the S.O and the confirmation must be in writing.
3.3.3
26
quantities of the work executed by the contractor which exceed the quantities shown
against in the contract, therefore it may constitute a variation and the client should pay
for the work done by the contractor.
3.3.4
Design Changes
Problem in bad design of the project always occur especially when there is
poor communication between the client and the consultant. The client dissatisfied
with the design made by the designer. For example, the client dissatisfied with the
layout of the electrical fitting because it can cause the personal injury or even loss of
life. If this problem occurs, the design must redesign the layout to modify and that is
costly. Basically these problems will only discover until during construction.
3.3.5
Communication
27
3.3.6
Client
If there is a variation works, the client must bear the cost incurred in the
works. In other words, the clients budget has increase because there is a variation
works especially for the contract based on the bills of quantities. Besides that, if there
is any variation work and time of the construction has extend, the client loss of the
profit because late in occupy the building. For example the construction for bungalow
houses, building should complete at the end of the year as stated in the contract. If
there is no variation works, the client may be can occupy the building, operate the
building, and make the profit from the building; but when there are a variation works,
the client cannot occupy the building and cannot make profit from the building. The
client bears the loss of the operation of the building.
3.3.7
Consultant
If the client request for the variation works, the Architect must produce the
new design in order to meet the new requirement of the client. Sometimes the
variation will affect the design, for example effect on the architecture view. It may
lead the designer feel unhappy because their work has been disturbed by the numbers
of variation. The quantity surveyor also has a problem when there is a variation work.
For example, the quantity surveyor should produce the new bills of quantities if the
new works not similar with the work in the original contract.
28
3.3.8 Contractor
The other problem in the variations is on the contractors side. The contractor
is difficult to claim for extra works or variations especially under the lump sum
contract. According to Ir. Harbans Singh K.S (2003), it is difficult for the contractor
to claim an extra/variation works unless the contractor satisfy the onerous burden of
establishing a clear cut charge in the scope of work as originally contracted for.
Besides that, when there are a numbers of variations, it may lead the contractor
feeling unmotivated and this will result in poor quality of works. The contractor also
faced the problem when there are variation works in the construction, the problem is
the contractor should reschedule the work program and it will affect the activities in
site.
3.4
Variations in construction industry will lead the impact to all the parties
involved in this sector. The main implication of variations is in term of time overrun
and cost.
3.4.1
Delay
Delay refers to the time taken in complete the work. There are in fact two
types of delay, which must be taken into account when valuing the effect of variation.
(Powell-Smith, 1990).
29
(i)
Delay to a critical path of the work, which will affect the general of the
work, thus the contractor retaining his general site overheads for the longer
period.
(ii)
Delays to part of the work that will not affect the overall completion but
the contractor still retain some particular item of plant on site longer than
planned.
(iii)
Loss and expense flowing directly from the execution of the varied work.
Standard Form Of Contract, (PWD Form 203 Rev. 10/83) provides a special
provision for delay to ensures that if variation instructions are late and cause delay to
the contractor then the client is entitled to grant of extension of time and enable the
contractor to claim for loss and expense, thus avoiding putting time at large and
unable to recover any liquidated and ascertain damages.
3.4.2
Cost
Variation also will give the effect in terms of cost. This cost that can be
identified such as additional expenses; financial charges and interest; and cost of site
overhead.
a)
30
b)
Cost of variation works preparation the cost arises when some work
elements have to be demolished including cost of removing materials
and rectifying defects.
c)
The cost incurred when the contractor wants to extend the project for a certain
period of time due to massive and complex variation work. It involved a large amount
of additional capital. Furthermore, the Contractor has to resort financial assistance
from banks or other financial institutions whereby interests or charges encumbered
upon the secured loan. (Chow Kok Fong, 1993)
The cost involved a large amount of additional cost for example the cost of
supervision, machinery and equipment, site safety and other facilities that are needed
to pay during extended time.
3.4.3
Quality of Works
The quality of the work will be at risk. The question is either the quality of
works achieves the standard requirement as per contract or not? If there are too many
instruction changes by the Architect or S.O, it may lead the contractor feeling
31
unmotivated and afraid for the possibility of changes in completed works and this will
result in poor quality of work and low productivity of the contractor.
3.4.4
3.4.5
Inconveniences
32
3.4.6
Unsatisfied
3.5
Summary
CHAPTER 4
4.1
Introduction
This chapter highlights the strategy action that can be taken in order to
minimise or controlling the variation during pre-contract stage and post-contract
stage. This chapter discussed on how the strategy action can be taken during precontract stage and post-contract in order to minimize variation order occur through
out in the construction period.
4.2
Pre-Contract Stgae
34
4.2.1
Project brief is important at the initial stage because it represent the clients
needs and the objectives. At the inception stage, the communication is important
between the client and the design team in order to avoid the poor contract
performance later. The consultant must totally understand the clients requirement and
the client should clear their needs so that it will help to reduce the miscommunications
between the parties. It is also to minimize the changes arise in the future as well as
variations.
4.2.2
Detailing Of Design
35
4.2.3
4.2.4
The client and designer will discuss together, so that there will be minimal
changes during the construction stage. Compare to the design and build, all the design
was prepared by the contractor based on the clients brief. So the possibilities of
increasing the number of variation works are high. Even though these both methods
have their own pros and cons, this will depend on the client to select the best method
which is suitable to apply for the project.
36
If the investigation is not adequate, it will result in additional cost future. This
is because if the investigation is not done adequately, it will have problems at
construction stage later when the site turns out to be not good as expected. This will
involve an additional cost and also involve a variation works in the future. The
investigation involves are a topographical survey and geotechnical investigation. In
order to avoid variation works, the investigations must be in detail and adequate. This
is one good way of reducing the variation claims.
4.2.6
37
4.3
4.3.1
Contractors Efficiency
4.3.2
38
4.3.3
Daily Check
Daily check is one of the actions to control the variation at post contract stage.
It is important because if there is a daily check on the site, the variation arise from the
contractors mistake can be reduced. The checking can be done by the S.O or S.Os
representative. The contractor should give a fully cooperation to them at this stage and
a good communication is needed.
4.3.3
Fully Inspection
4.3.4
The contractor and the consultants must comply with all Local Authoritys
requirement. All the works carried out by the contractor must according to the
specifications by the Local Authority and the contract, for example requirements from
Fire and Rescue Department, Drainage and Irrigation Department (JPS) and others. It
39
is important to comply with all requirements in order to control the variation work. If
the works not follow the requirement, the work might be rectified or demolished and
must reconstruct according to the specification. This will result variation works.
4.4
Summary
From the literature review research above, therefore the strategy action that
can be taken in order to minimize the variation can be summarized as two categories
which during pre-contract stage such as clear and thoroughly project brief; detailing
of design; adequate time in preparation of documentation; management procurement
Strategy; detail and adequate investigation; and provision of complete documentation.
While during post contract stage can be summarized as contractors efficiency; daily
check; fully inspection; and comply with all requirement.
CHAPTER 5
RESEARCH METHODOLOGY
5.1
Introduction
The data collection based on the literature review could be collected in several
ways. Buckley et all (1976) grouped the methodology of data collection under four
headings; namely opinion research, empirical research, archival research and
analytical research. Each method has its own strengths and limitations, and none
could be considered superior that the others. The decision as to which methods to use
must be based on the survey objectives, the nature of the information required and the
resources available (Jobber, 1991).
41
The types of variation and the factors that influence the variation have been
discussed in the previous chapter which covers the primary input of Variation Order.
It has completing the objective to study what are the meaning of variation and and
type of variation that cause of variation order.
5.2
There are three sections under the literature review where the first section
explained and discussed the types of variation and the factors influence the variation
which begin with the definition of variation order. The second section describe the
problem in variation order and the implication of variation order. And the third
section described the strategy action that can be taken to control or minimize the
variation order in the construction. The source of data is obtained from the reading
materials and such as books, articles and seminars paper and other published
information supporting the topic of variation order.
42
5.3
The second stage consists of preparing and collecting of primary data through
interview session and based on the case study. Generally the data is collected directly
from the professional parties which are relevant to the topic and also from the
professional parties whom directly involve in the case study. Analysis of data by
using qualitative methods is required to determine the factors that influence the
variation and the strategy action to be taken in order to control or minimize the
variation start from pre-contract stage until post-contract stage. The case study were
selected which the development of the project are similar and by using the same
procurement method which is traditional method. The data collected from the case
study and interview are gathered and analyzed by using percentage analysis and the
qualitative method by comparing the three case studies in project background, project
details and the list of variation occur in final contract in which to identify the major
factors that influence variation, the problem in variation and the implication that
related to variation order during pre-contract stage and post contract stage.
43
5.4
Stage 3 : Recommendation
In this stage is the final stage of the research methodology. The final stage of
this study is to define the conclusion and recommendation with reference to the
objective, subsequent to the analysis from the case study and interviews.
5.5
Summary
For the conclusion, this chapter is discussing about the methods of collecting
all data and analysis of the result from the interviews and case study. The data is
analyzed by using qualitative methods to complete the requirement of the research.
CHAPTER 6
6.1
Introduction
This chapter will look at the some project that involved the variation works.
There are three (3) case study that have been selected in order to fully understand on
the factors that influence to variation, the problems that influence to variation and the
implication of variations work, and also to find out what are the strategy action taken
in order to control or minimize the variations in the construction.
All of three case study using the same procurement strategy, which are
Standard Form of IEM.CE 1/89 and have completed with the final account. The
completed project with final account has been choose in order to know the amount of
variation works involved and how far the cost of variation works affected the cost of
the original contract sum. The three case studies are as follows:
(i)
(ii)
(iii)
45
6.2
Case Study 1
is
value
at
RM
32,747,987.00
and
adjustment
to
Contract
Sum
RM16, 621,218.60 which made the final contract sum to RM 49,369,205.60. The
contract period for this project is 72 weeks and the date of site possession is on
9thJune 2003 which the original of completion date on 15th March 2005, but the actual
completion date is on 30th October 2006 with the defect Liability Period which on
30thApril 2007.
List of the variation works as shown in Table 6.1 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are forty four (44) variation works involved including
re-measurement works.
V.O
NO
TOTAL(RM)
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Outside Drain
2,705,545.00
2.
280,000.00
3.
Side Drain
Site Condition
294,765.00
4.
1,889,946.00
5.
1,062,600.00
6.
860,000.00
7.
Kolam takungan
1,064,000.00
8.
Kumbahan
9.
93,250.00
To comply Majlis Daerah requirement
1,378,545.00
OMISSION
10.
Site Condition
50,000.00
11.
Error in BQ
80,000.00
Bungalow House
12.
13.
Changes on design
450,000.00
Changes on design
240,000.00
Kolej KINI
Changes on design
651,260.00
15.
Error in BQ
353,000.00
16.
Error in BQ
148,600.00
17.
12,348.00
18.
102,900.00
19.
55,000.00
9,000.00
21.
Site condition
347,807.00
Bungalow 6B,37C,72A)
22.
Error in BQ
glass (Bungalow A)
39,000.00
15,000.00
23.
Changes lockset
Clients request
24.
Error in BQ
24,000.00
1,303,797.80
Bungalow
25.
26.
Preliminary Hoarding
Remesurement
27.
Remesurement
35,375.00
146,000.00
60,000.00
41,000.00
Pasar)
28
Water Reticulation
Remesurement
343,000.00
29.
Remesurement
107,536.00
Remesurement
330,783.52
31.
Clients request
30,000.00
959,971.30
Piling works
Site Condition
33.
TCT rolform
Error in BQ
55,800.00
34.
Error in BQ
21,000.00
35.
Error in BQ
150,000.00
36.
Railing
Error in BQ
301,000.00
37.
Box culvert
845,000.00
38.
Clients request
39.
40.
41.
Clients request
82,000.00
42.
Clients request
280,000.00
43.
Clients request
345,000.00
44.
Clients request
426,478.00
18,000.00
71,000.00
1,000,000.00
Total
18,155,613.10
Net total
16,621,218.60
1,533,694.50
6.3
Case Study 2
List of the variation works as shown in Table 6.2 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are forty seven (47) variation works involved including remeasurement works.
V.O
TOTAL(RM)
NO
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Error in BQ
222,464.90
2.
Error in BQ
68,000.00
3.
Error in BQ
74,400.00
4.
Error in BQ
5.
Error in BQ
6.
Telekom)
7.
Error in BQ
119,214.00
8.
Error in BQ
57,200.00
9.
90,000.00
158,000.00
OMISSION
Error in BQ
73,920.00
10.
Error in BQ
59,900.00
11.
Block Drains
12.
Error in BQ
67,814.21
13.
Error in BQ
138,980.00
14.
Error in BQ
392,750.00
15.
Error in BQ
81,143.05
16.
20,477.60
17.
Error in BQ
20,000.00
18.
Error in BQ
54,560.00
2,000.00
136,512.00
weather.
19.
Change in design
626,287.78
20.
Tandas Kolej
Clients request
198,130.80
21.
Medan Selera
Remesurement
27,987.87
22.
Pasar
Change in design
54,926.76
23.
Change in design
19,173.35
24.
Tadika/ IT Centre/Library
25.
Surau
Change in design
158,200.00
26.
Change in design
211,038.75
27.
Error in BQ
294,962.19
28.
225,000.00
29.
Remesurement
61631.89
JPS Upgrading
31.
Water Reticulation
Remesurement
398,064.80
32.
Remesurement
917,853.90
33.
Suction Tank
Remesurement
599,397.96
34.
Remesurement
110,000.00
35.
Remesurement
6,609.00
8,342,637.67
763,891.08
36.
Pilling Works
37.
R.C Piles
Remesurement
436,406.00
38.
Remesurement
117.463.50
39.
Extension Joints
Remesurement
15,769.10
40.
Cut-Off Piles
Remesurement
32,752.00
41.
Load Testing
Remesurement
17,600,00
42.
Remesurement
7,000.00
43.
Remesurement
6,000.00
44.
Piling Record
Remesurement
2,400.00
45.
Mackintosh Probes
Remesurement
9,000.00
46.
Remesurement
57,982.00
47.
Remesurement
48,556.00
10,000.00
Total
12,983,381.04
Net total
12,983,381.04
6.4
Case Study 3
List of the variation works as shown in Table 6.2 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are thirty five (35) variation works involved including remeasurement works.
V.O
TOTAL (RM)
NO
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Error in BQ
130,954.50
A,B,C,D,E, Surau)
2.
3.
2,053,206.00
Error in BQ
656,554.48
4.
Clients request
209,950.00
5.
design)
74,700.90
OMISSION
6.
77,461.32
7.
Clients request
47,888.10
8.
Clients request
327,317.70
9.
Clients request
2,992,400.00
10.
11.
Clients request
12.
Besout
593,396.00
13,800.00
2,000,000.00
13.
1,200,000
14.
754,960.00
15.
1,250,00.00
16.
Remesurement
14,473.20
17.
External Works
Remesurement
2,300,750.00
18.
8,140,000.00
19.
Preliminary Hoarding
Remesurement
43,000.00
20.
Remesurement
585,000.00
Water Reticulation
Remesurement
45,000.00
21.
Remesurement
415,000.00
Tadika)
22.
Remesurement
150,000.00
23.
Clients request
100,000.00
Error in BQ
48,528.00
25.
Error in BQ
65,000.00
26.
Error in BQ
100,000.00
27.
Error in BQ
300,000.00
28.
Error in BQ
50,000.00
29.
Error in BQ
20,000.00
30.
Error in BQ
50,000.00
weather.
31.
Error in BQ
20,000.00
32.
Error in BQ
70,000.00
33.
Error in BQ
80,000.00
34.
House
35.
Railing
Error in BQ
200,000.00
Total
Net total
15,820,340.00
60
6.5
a.
The result of the types of variation and the factors that influence to the
variation
From the three case studies above, the analysis and the result of the types of
variations were tabulated in the Table 6.4. While the factors that influence the
variation can be shown in the 6.5. Based on the Table 6.5 the percentage of the factors
that influence the variation have been summaries in the Figure 6.1
2.
3.
Types of variation
Example
initiator
According to nature of
variation
combination of both.
variation
61
Item
No. of variations
variations
Case
Case
Case
Study 1
Study 2
Study 3
Total
Clients request
13
Change in design
11
Errors in Bills of
10
16
14
40
15
24
Quantities
4
S.Os instruction
Remeasurement
18
31
5%
25%
Clients request
10%
9%
Change in design
Errors in Bills of Quantities
1%
19%
32%
62
b.
The result of the problems that influence and the implication to the
variation
From the three case studies above, many problems that influence to variation
works. The variation works also give an implication to the construction itself. The
result of the problem that influence to the variation was identified in two categories
which during planning stage and construction stage as shown in Table 6.6.
1.
Planning Stage
Construction Stage
No survey work
project
2.
3.
Misunderstanding in communication
documentation
4.
5.
tender documentation
63
The major implication was identified as cost overrun as shown in Table 6.7
and the percentage that summarized the cost overrun shows in Figure 6.2. While the
delays of the construction work was identified as shown in Table 6.8. The percentage
of implication to the variation was shown in the Figure 6.3 which the result shows the
case study 1 was delay more than 51% compared to two case studies above.
Case
Implication of variations
Study
Cost Overrun
Original
Final
Variation
Percent
Contract
Contract
order
(%) of
Amount
Amount
total
variation
Case
32,747,987.00
49,369,205.60
16,621,218.60
51%
45,000,000.00
57,983,300.00
12,983,300.00
42%
38,000,000.00
53,820,340.00
15,820,340.00
29%
115,747,987.00
161,172,845.60
45,424,858.60
Study 1
2
Case
Study 2
Case
Study 3
Total
64
42%
51%
Case study 1
Case study 2
Case study 3
29%
Bil
Case
Implication of variations
Study
Delay
Case
Original
Final
Delay
Percent
Contract
Contract
(days)
(%) of
Period
Period
504
700
196
39%
504
1,008
504
100%
504
952
448
89%
1,512
2660
1,148
total delay
Study 1
2
Case
Study 2
Case
Study 3
Total
65
39%
89%
Case Study 1
Case Study 2
Case Study 3
100%
c.
The result of the strategy action that can be taken to minimize variation
The last section of the case study is to identify the strategy action that can be
taken to minimize or control the variation work. The result can be tabulated in table
6.9 as shown below.
66
Item
1.
Construction Stage
2.
brief
3.
Appropriate use of
procurement strategy
4.
fully investigate.
design.
5.
6.6
Quality contract
documentation
requirement
This section discussed the findings of this study. The results of the study are
analysed and discussed in the following sequence to answer the objectives mentioned
in Chapter 1. The analysis sequence is organized and presented the data in some
meaningful and logical order. After the data have been organized and presented into
description manner, it is then analyses them in order to draw inference about the data
obtained. The discussion are included the factor that influence the variation, the
problems that can cause the problem and then followed by the implication of variation
work. Finally, discuss on the strategy action that can be taken to minimize or control
variation work. Discussion on the finding will be based on the case study and
interview responding to the objectives.
67
a.
First Objective : To identify the types of variation and the factor that
influences the variation.
This section will discuss the finding based on the results obtained from the
interview and the case study in which the types of variation and the factors of
variation were identified. Table 6.4 shows the result types of variation and the factors
that influence this.
Types of variation
Example
2.
3.
From the Table 6.4, it can be concluded that, there are three types of variation
that can be categorized by the identity of initiator which can be change to one another
such as client or employer, consultant such as architect or engineer, the authority
requirement and also the contractor. The nature of variation such as the nature of
work such as site condition or weather, any changes in the condition of contract and
the variation by the omission or addition work during construction. The third type of
variation shows that the financial consequence or effect of variation such as financial
consideration or time implication such as adjustment in the contract sum during
construction in progress.
68
Clients request
10
Change in design
32
19
requirement
5
S.Os instruction
Remeasurement
25
From the Table 6.10, it can be concluded that, the major factor that influence
the variation work is comes from the Error in Bill of Quantities. From the table 6.10
above, it shows that 32% of the variation works comes from the Error in Bill of
Quantities. Almost every project has a variation from Error in Bill of Quantities.
Besides that, the re-measurements of the work also contribute to the variation
of works. From the Table 6.10 , it can see that the re-measurement contribute 25%
and follow by Local Authoritys requirement which from the case studies above, it
shows that the Local authority contribute 19% to variation works. It is important to
follow the regulation from the Local Authority because if the requirement not
properly followed, it may cause the variation works. From example from the case
study above, variation works arise where the thick of the crusher-run of road used in
the project not according to the specification from the JKR. Therefore the changes
have to follow as the authority requirement.
Beside that, the client request also contribute to the variation works which
from the Table 6.10 shows 10%, and followed by the variation works which is
69
changes in design which is 9%, suit the site condition is 5%, and also from the case
studies above, it shows that there is only 1% of S.Os instruction that contribute to the
variation works.
b.
From the factor above, the problem that influence of variation has been
identified which can be divided into two stages. The first stage was during planning
stage and the second was during construction stage. The major problem that
influences variation during planning stage and construction stage were identified as
shown in table 6.5.
70
1.
Planning Stage
Construction Stage
No survey work
project
2.
3.
Misunderstanding in
documentation
team
4.
tender documentation
While the implication of variation from the three case studies above, it can be
seen that the variation works give an implication to the construction itself. The
obvious implication of the variations is show in the Table 6.11 which cost overruns
that carried by the contractor should be paid as extra work or variation.
71
ITEM
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
32,747,987.00
16,6218.60
16,6218.00
49,369,205.60
From the case study 1, it can be concluded that the total net of cost for
variation works is RM 16,621,218.00 to the contract sum. This means that the
contract sum must be added for amount of RM16,621,218.00 which increase 51%
form the original contract amount. The final contract amount is RM49,369,205.60.
The summary of this result show in the Table 6.11 above.
ITEM
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
45,000,000.00
12,983,300.00
12,983,300.00
57,983,300.00
From the case study 2, have same implication which is cost overrun because of
the
variation
works.
The
original
contract
amount
increase
42%
from
72
ITEM
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
38,000,000.00
15,820,340.00
15,820,340.00
53,820,340.00
From the case study 3, it can be concluded that the variation works involved
only in net additional works which cost of RM 15,820,340.00 to be added to the
original contract amount. The original contract amount increase 29% from RM
38,000,000.00 to RM 53,820,340.00. The summary of this result shows in the Table
6.13.
The other implication to the variation is delay of the project. From three case
studies show that almost all the project was delay due to the variation order. Table
6.14 shown delay in the construction period due to the variation works.
Case Study
Implication of variations
Delay
Original
Final
Delay
(%) of
Contract
Contract
(days)
total delay
Period
Period
Case Study 1
504
700
196
39%
Case Study 2
504
1,008
504
100%
Case Study 3
504
952
448
89%
73
From the Table 6.14 above, shows that the case study 2 was delay 100% of the
original contract period which contribute about 1,008 days compare of cased study 3
which contribute 89% of delay about 952 days, then followed by the case study 1
which contribute 39% of delay about 700 days. This result shows that the case study 2
was delay the most in the construction work compared the other two case studies.
c.
This section discussed the finding based on the result obtained from the cased
study and interview to identify the strategy action that can be taken to minimize or
control the variation works. The strategy action can be taken as early in planning
stage and also construction stage there are identified as:
Comprehensive site investigation; based on the case study above, there are a
numbers of the variation occur caused due to suit the site condition. It is clear that
before the construction start, it need a comprehensive site investigation. For example
of site investigation is topographical survey and geotechnical investigation. Although
the cost incurred in the site investigation is usually a small fraction of the total project,
but the clients or related parties do not appreciate the importance of the survey and no
investigation is carried out, the construction may turns out to be not good, if survey is
properly done, the variation works might be reduced and cost is under control.
74
Besides that, if there is variation works, the contractor must ensure that he has
clearly defined procedures for identifying variations and that he must conforms to full
requirements of the contract. Hence the contract must be clearly presented. The
implication if the contract document prepared is incomplete, it will be the causes of
cost overruns.
More thorough detailing in design; detail design can reduce variation in future.
The design developed in depth at the pre-contract stage with the cooperation must be
developed in order to avoid the claims and dispute. Any changes later will result in
abortive works and almost certainly in additional cost. From the case studies above,
changes in design will result the variation works. In order to control the variations, the
design team must properly design with take all the consideration including site
condition and requirement by the Local Authority into the design.
75
6.7
Summary
The final result of the analysis was listed. According to the result analysis it
shows that there are three types of variation and the most factor that influence the
variation is Error in Bill of Quantities. And there are five problems that can cause
variation during planning stage and construction stage. Therefore the implication of
variation it shows that the cost overruns of the project and the delay in the
construction period were the most implication of variation. Lastly, the strategy action
that can be taken to minimize or control the variation is focusing during planning
stage and also construction stage.
45
6.2
Case Study 1
is
value
at
RM
32,747,987.00
and
adjustment
to
Contract
Sum
RM16, 621,218.60 which made the final contract sum to RM 49,369,205.60. The
contract period for this project is 72 weeks and the date of site possession is on
9thJune 2003 which the original of completion date on 15th March 2005, but the actual
completion date is on 30th October 2006 with the defect Liability Period which on
30thApril 2007.
List of the variation works as shown in Table 6.1 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are forty four (44) variation works involved including
re-measurement works.
TOTAL(RM)
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Outside Drain
2,705,545.00
2.
280,000.00
3.
Side Drain
Site Condition
294,765.00
4.
1,889,946.00
5.
1,062,600.00
6.
860,000.00
7.
Kolam takungan
1,064,000.00
8.
Kumbahan
9.
93,250.00
To comply Majlis Daerah requirement
1,378,545.00
OMISSION
10.
Site Condition
50,000.00
11.
Error in BQ
80,000.00
Bungalow House
12.
13.
Changes on design
450,000.00
Changes on design
240,000.00
Kolej KINI
Changes on design
651,260.00
15.
Error in BQ
353,000.00
16.
Error in BQ
148,600.00
17.
12,348.00
18.
102,900.00
19.
55,000.00
9,000.00
21.
Site condition
347,807.00
Bungalow 6B,37C,72A)
22.
Error in BQ
glass (Bungalow A)
39,000.00
15,000.00
23.
Changes lockset
Clients request
24.
Error in BQ
24,000.00
1,303,797.80
Bungalow
25.
26.
Preliminary Hoarding
Remesurement
27.
Remesurement
35,375.00
146,000.00
60,000.00
41,000.00
Pasar)
28
Water Reticulation
Remesurement
343,000.00
29.
Remesurement
107,536.00
Remesurement
330,783.52
31.
Clients request
30,000.00
959,971.30
Piling works
Site Condition
33.
TCT rolform
Error in BQ
55,800.00
34.
Error in BQ
21,000.00
35.
Error in BQ
150,000.00
36.
Railing
Error in BQ
301,000.00
37.
Box culvert
845,000.00
38.
Clients request
39.
40.
41.
Clients request
82,000.00
42.
Clients request
280,000.00
43.
Clients request
345,000.00
44.
Clients request
426,478.00
18,000.00
71,000.00
1,000,000.00
Total
18,155,613.10
Net total
16,621,218.60
1,533,694.50
6.3
Case Study 2
List of the variation works as shown in Table 6.2 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are forty seven (47) variation works involved including remeasurement works.
TOTAL(RM)
NO
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Error in BQ
222,464.90
2.
Error in BQ
68,000.00
3.
Error in BQ
74,400.00
4.
Error in BQ
5.
Error in BQ
6.
Telekom)
7.
Error in BQ
119,214.00
8.
Error in BQ
57,200.00
9.
90,000.00
158,000.00
OMISSION
Error in BQ
73,920.00
10.
Error in BQ
59,900.00
11.
Block Drains
12.
Error in BQ
67,814.21
13.
Error in BQ
138,980.00
14.
Error in BQ
392,750.00
15.
Error in BQ
81,143.05
16.
20,477.60
17.
Error in BQ
20,000.00
18.
Error in BQ
54,560.00
2,000.00
136,512.00
weather.
19.
Change in design
626,287.78
20.
Tandas Kolej
Clients request
198,130.80
21.
Medan Selera
Remesurement
27,987.87
22.
Pasar
Change in design
54,926.76
23.
Change in design
19,173.35
24.
Tadika/ IT Centre/Library
25.
Surau
Change in design
158,200.00
26.
Change in design
211,038.75
27.
Error in BQ
294,962.19
28.
225,000.00
29.
Remesurement
61631.89
JPS Upgrading
31.
Water Reticulation
Remesurement
398,064.80
32.
Remesurement
917,853.90
33.
Suction Tank
Remesurement
599,397.96
34.
Remesurement
110,000.00
35.
Remesurement
6,609.00
8,342,637.67
763,891.08
36.
Pilling Works
37.
R.C Piles
Remesurement
436,406.00
38.
Remesurement
117.463.50
39.
Extension Joints
Remesurement
15,769.10
40.
Cut-Off Piles
Remesurement
32,752.00
41.
Load Testing
Remesurement
17,600,00
42.
Remesurement
7,000.00
43.
Remesurement
6,000.00
44.
Piling Record
Remesurement
2,400.00
45.
Mackintosh Probes
Remesurement
9,000.00
46.
Remesurement
57,982.00
47.
Remesurement
48,556.00
10,000.00
Total
12,983,381.04
Net total
12,983,381.04
6.4
Case Study 3
List of the variation works as shown in Table 6.2 shows the factor that
influence to the variation works and also the cost incurred for each variation work.
For this project, there are thirty five (35) variation works involved including remeasurement works.
TOTAL (RM)
NO
DESCRIPTION
ADDITION
VARIATION WORKS
1.
Error in BQ
130,954.50
A,B,C,D,E, Surau)
2.
3.
2,053,206.00
Error in BQ
656,554.48
4.
Clients request
209,950.00
5.
design)
74,700.90
OMISSION
6.
77,461.32
7.
Clients request
47,888.10
8.
Clients request
327,317.70
9.
Clients request
2,992,400.00
10.
11.
Clients request
12.
Besout
593,396.00
13,800.00
2,000,000.00
13.
1,200,000
14.
754,960.00
15.
1,250,00.00
16.
Remesurement
14,473.20
17.
External Works
Remesurement
2,300,750.00
18.
8,140,000.00
19.
Preliminary Hoarding
Remesurement
43,000.00
20.
Remesurement
585,000.00
Water Reticulation
Remesurement
45,000.00
21.
Remesurement
415,000.00
Tadika)
22.
Remesurement
150,000.00
23.
Clients request
100,000.00
Error in BQ
48,528.00
25.
Error in BQ
65,000.00
26.
Error in BQ
100,000.00
27.
Error in BQ
300,000.00
28.
Error in BQ
50,000.00
29.
Error in BQ
20,000.00
30.
Error in BQ
50,000.00
weather.
31.
Error in BQ
20,000.00
32.
Error in BQ
70,000.00
33.
Error in BQ
80,000.00
34.
House
35.
Railing
Error in BQ
200,000.00
Total
Net total
15,820,340.00
60
6.5
a.
The result of the types of variation and the factors that influence to the
variation
From the three case studies above, the analysis and the result of the types of
variations were tabulated in the Table 6.4. While the factors that influence the
variation can be shown in the 6.5. Based on the Table 6.5 the percentage of the factors
that influence the variation have been summaries in the Figure 6.1
Types of variation
Example
initiator
According to nature of
variation
combination of both.
variation
61
No. of variations
variations
Case
Case
Case
Study 1
Study 2
Study 3
Total
Clients request
13
Change in design
11
Errors in Bills of
10
16
14
40
15
24
Quantities
4
S.Os instruction
Remeasurement
18
31
5%
25%
10%
Clients request
9%
Change in design
Errors in Bills of Quantities
1%
19%
32%
62
b.
The result of the problems that influence and the implication to the
variation
From the three case studies above, many problems that influence to variation
works. The variation works also give an implication to the construction itself. The
result of the problem that influence to the variation was identified in two categories
which during planning stage and construction stage as shown in Table 6.6.
Planning Stage
Construction Stage
No survey work
project
2.
3.
Misunderstanding in communication
documentation
4.
5.
tender documentation
63
The major implication was identified as cost overrun as shown in Table 6.7
and the percentage that summarized the cost overrun shows in Figure 6.2. While the
delays of the construction work was identified as shown in Table 6.8. The percentage
of implication to the variation was shown in the Figure 6.3 which the result shows the
case study 1 was delay more than 51% compared to two case studies above.
Case
Implication of variations
Study
Cost Overrun
Original
Final
Variation
Percent
Contract
Contract
order
(%) of
Amount
Amount
total
variation
Case
32,747,987.00
49,369,205.60
16,621,218.60
51%
45,000,000.00
57,983,300.00
12,983,300.00
42%
38,000,000.00
53,820,340.00
15,820,340.00
29%
115,747,987.00
161,172,845.60
45,424,858.60
Study 1
2
Case
Study 2
Case
Study 3
Total
64
42%
51%
Case study 1
Case study 2
Case study 3
29%
Bil
Case
Implication of variations
Study
Delay
Case
Original
Final
Delay
Percent
Contract
Contract
(days)
(%) of
Period
Period
504
700
196
39%
504
1,008
504
100%
504
952
448
89%
1,512
2660
1,148
total delay
Study 1
2
Case
Study 2
Case
Study 3
Total
65
39%
89%
Case Study 1
Case Study 2
Case Study 3
100%
c.
The result of the strategy action that can be taken to minimize variation
The last section of the case study is to identify the strategy action that can be
taken to minimize or control the variation work. The result can be tabulated in table
6.9 as shown below.
66
Item
1.
Construction Stage
2.
brief
3.
Appropriate use of
procurement strategy
4.
fully investigate.
design.
5.
6.6
Quality contract
documentation
requirement
This section discussed the findings of this study. The results of the study are
analysed and discussed in the following sequence to answer the objectives mentioned
in Chapter 1. The analysis sequence is organized and presented the data in some
meaningful and logical order. After the data have been organized and presented into
description manner, it is then analyses them in order to draw inference about the data
obtained. The discussion are included the factor that influence the variation, the
problems that can cause the problem and then followed by the implication of variation
work. Finally, discuss on the strategy action that can be taken to minimize or control
variation work. Discussion on the finding will be based on the case study and
interview responding to the objectives.
67
a.
First Objective : To identify the types of variation and the factor that
influences the variation.
This section will discuss the finding based on the results obtained from the
interview and the case study in which the types of variation and the factors of
variation were identified. Table 6.4 shows the result types of variation and the factors
that influence this.
Types of variation
Example
2.
3.
From the Table 6.4, it can be concluded that, there are three types of variation
that can be categorized by the identity of initiator which can be change to one another
such as client or employer, consultant such as architect or engineer, the authority
requirement and also the contractor. The nature of variation such as the nature of
work such as site condition or weather, any changes in the condition of contract and
the variation by the omission or addition work during construction. The third type of
variation shows that the financial consequence or effect of variation such as financial
consideration or time implication such as adjustment in the contract sum during
construction in progress.
68
Clients request
10
Change in design
32
19
requirement
5
S.Os instruction
Remeasurement
25
From the Table 6.10, it can be concluded that, the major factor that influence
the variation work is comes from the Error in Bill of Quantities. From the table 6.10
above, it shows that 32% of the variation works comes from the Error in Bill of
Quantities. Almost every project has a variation from Error in Bill of Quantities.
Besides that, the re-measurements of the work also contribute to the variation
of works. From the Table 6.10 , it can see that the re-measurement contribute 25%
and follow by Local Authoritys requirement which from the case studies above, it
shows that the Local authority contribute 19% to variation works. It is important to
follow the regulation from the Local Authority because if the requirement not
properly followed, it may cause the variation works. From example from the case
study above, variation works arise where the thick of the crusher-run of road used in
the project not according to the specification from the JKR. Therefore the changes
have to follow as the authority requirement.
Beside that, the client request also contribute to the variation works which
from the Table 6.10 shows 10%, and followed by the variation works which is
69
changes in design which is 9%, suit the site condition is 5%, and also from the case
studies above, it shows that there is only 1% of S.Os instruction that contribute to the
variation works.
b.
From the factor above, the problem that influence of variation has been
identified which can be divided into two stages. The first stage was during planning
stage and the second was during construction stage. The major problem that
influences variation during planning stage and construction stage were identified as
shown in table 6.5.
70
Planning Stage
Construction Stage
No survey work
project
2.
3.
Misunderstanding in
documentation
team
4.
tender documentation
While the implication of variation from the three case studies above, it can be
seen that the variation works give an implication to the construction itself. The
obvious implication of the variations is show in the Table 6.11 which cost overruns
that carried by the contractor should be paid as extra work or variation.
71
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
32,747,987.00
16,6218.60
16,6218.00
49,369,205.60
From the case study 1, it can be concluded that the total net of cost for
variation works is RM 16,621,218.00 to the contract sum. This means that the
contract sum must be added for amount of RM16,621,218.00 which increase 51%
form the original contract amount. The final contract amount is RM49,369,205.60.
The summary of this result show in the Table 6.11 above.
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
45,000,000.00
12,983,300.00
12,983,300.00
57,983,300.00
From the case study 2, have same implication which is cost overrun because of
the
variation
works.
The
original
contract
amount
increase
42%
from
72
DESCRIPTION
OMISSION
1.
2.
Net Addition
ADDITION
38,000,000.00
15,820,340.00
15,820,340.00
53,820,340.00
From the case study 3, it can be concluded that the variation works involved
only in net additional works which cost of RM 15,820,340.00 to be added to the
original contract amount. The original contract amount increase 29% from RM
38,000,000.00 to RM 53,820,340.00. The summary of this result shows in the Table
6.13.
The other implication to the variation is delay of the project. From three case
studies show that almost all the project was delay due to the variation order. Table
6.14 shown delay in the construction period due to the variation works.
Case Study
Implication of variations
Delay
Original
Final
Delay
(%) of
Contract
Contract
(days)
total delay
Period
Period
Case Study 1
504
700
196
39%
Case Study 2
504
1,008
504
100%
Case Study 3
504
952
448
89%
73
From the Table 6.14 above, shows that the case study 2 was delay 100% of the
original contract period which contribute about 1,008 days compare of cased study 3
which contribute 89% of delay about 952 days, then followed by the case study 1
which contribute 39% of delay about 700 days. This result shows that the case study 2
was delay the most in the construction work compared the other two case studies.
c.
This section discussed the finding based on the result obtained from the cased
study and interview to identify the strategy action that can be taken to minimize or
control the variation works. The strategy action can be taken as early in planning
stage and also construction stage there are identified as:
Comprehensive site investigation; based on the case study above, there are a
numbers of the variation occur caused due to suit the site condition. It is clear that
before the construction start, it need a comprehensive site investigation. For example
of site investigation is topographical survey and geotechnical investigation. Although
the cost incurred in the site investigation is usually a small fraction of the total project,
but the clients or related parties do not appreciate the importance of the survey and no
investigation is carried out, the construction may turns out to be not good, if survey is
properly done, the variation works might be reduced and cost is under control.
74
Besides that, if there is variation works, the contractor must ensure that he has
clearly defined procedures for identifying variations and that he must conforms to full
requirements of the contract. Hence the contract must be clearly presented. The
implication if the contract document prepared is incomplete, it will be the causes of
cost overruns.
More thorough detailing in design; detail design can reduce variation in future.
The design developed in depth at the pre-contract stage with the cooperation must be
developed in order to avoid the claims and dispute. Any changes later will result in
abortive works and almost certainly in additional cost. From the case studies above,
changes in design will result the variation works. In order to control the variations, the
design team must properly design with take all the consideration including site
condition and requirement by the Local Authority into the design.
75
6.7
Summary
The final result of the analysis was listed. According to the result analysis it
shows that there are three types of variation and the most factor that influence the
variation is Error in Bill of Quantities. And there are five problems that can cause
variation during planning stage and construction stage. Therefore the implication of
variation it shows that the cost overruns of the project and the delay in the
construction period were the most implication of variation. Lastly, the strategy action
that can be taken to minimize or control the variation is focusing during planning
stage and also construction stage.
CHAPTER 7
7.1
Introduction
This chapter concludes the study by listing and summarized the result of the
analysis. Based on the literature reviews, interview and the case study and result
analysis, the three main objectives of this project report have been achieved.
7.2
Conclusions
77
First Objective :
There are three types of variation that can be categorized by the identity of
initiator which can be change to one another such as client or employer, consultant
such as architect or engineer, by the authority requirement and also the contractor.
The by the nature of variation such as the nature of work such as site condition or
weather, any changes in the condition of contract and the variation by the omission or
addition work during construction. The third type of variation shows that the financial
consequence or effect of variation such as financial consideration or time implication
such as adjustment in the contract sum during construction in progress. Based on the
case studies in Chapter 6 on this project report, the factor that influence the variation
has been identified which are as follows:
1.
Clients request;
2.
Change in design;
3.
4.
5.
S.Os instruction;
6.
Reameasurement; and
7.
78
Second Objective :
The problem that was identified was during planning stage. It can be listed
below which are:
1.
2.
3.
4.
5.
While the problems during construction stage that influence to the variation
was identified as:
1.
No survey work
2.
3.
4.
5.
The obvious implication of the variation is cost overrun. The works carried out
by the contractor should be paid for an extra works or variation. This will result of
cost overrun. Based on the case studies, all of the three project has increment on cost
more that 30% of the original contract amount. The cost includes the additional
expenses, which are transportation expenses, cost of variation works preparation,
other cancellation expenses, financial charges and also cost of site overheads.
79
Third Objective :
Based on the analysis and result above, it can be concluded that,the strategy
action that can be taken to minimize or control variations during planning stage. This
can be listed as below.
1.
2.
Detailing in design
3.
4.
5.
Project brief is important at the initial stage because it represents the clients
needs and clear project brief will avoid the poor contract performance in future. It is
also to minimize the changes arise in the future.
80
in depth at the pre-contract stage in order to avoid the claims and dispute later and any
changes later will result changes of works and additional cost.
Based on the analysis and result above, it can be concluded that strategy action
also can be taken in order to minimize variation was during construction stage. The
strategy action that cab be taken can be listed below.
1.
Contractor efficiencys
2.
3.
4.
5.
Variation works can be controlled by having a daily check and systematic site
record on the works. The works carried out by the contractor must be check to make
sure it is according to specification. If there is a systematic site record, it is indirectly
can control the variation works and it depends on the technique of keeping the record
and the management on the site.
All day check before issue to the contractor is a checking made before the S.O
issue the any instruction to the contractor consist of variation works. This is including
checking for the originality of the works and the contractors scope of works either
according to the contract or not in order to avoid the variation.
81
Based on the case studies on Chapter 6, most of the variation works arise
caused by the changes in Local Authoritys requirement. In order to reduce the
variation works, the S.O must make sure that the design and specification of the
works according to the requirement stated by the Local Authority. Besides that, the
contractor should also carry out the work according to the specification given. If the
works are properly done and followed all the requirement stated by the Local
authority it will reduce the numbers of variation of works
82
7.3
Recommendation
83
REFERENCES
Sundra Rajoo, (1999), The Malaysian Standard Form Of Building Contract, The
PAM 1998 Form (2nd Edition), Malayan Law Journal Sdn Bhd.
Ir.
Harbans
Singh
K.S.,(2002),
Engineering
And
Construction
Contract
84
Wan Maimunah Bt. Wan Abdullah, (1993), Variation Works in a Contract, (1st
Quarter) The Malaysian Surveyor, Institutions of Surveyors Malaysia.
Entrusty Group, (2002), What Constitutes A Variation And How Does One Value
Variations, (2nd Quarter), Journal Of Master Builders.