International Journal of Engineering Research and General Science Volume 4, Issue 4, July-August, 2016

ISSN 2091-2730

Causes of Variation Orders on Public Building

1
Projects in Addis Ababa
Andualem Endris Yadeta
1
School of Civil and Environmental Engineering, Addis Ababa Institute of Technology, Addis Ababa University, Addis Ababa,
Ethiopia.
P.O Box: 57381, Addis Ababa, Ethiopia
andu0117@yahoo.com

Abstract: Variation is inevitable in construction projects due to the complex nature of the construction industry. It is common in all
types of construction projects and it determines the time limits and anticipated budget of the projects. Variation order is observed as
one of the most frequently occurring issues in construction projects in Ethiopia. Like other regions of the country, construction
projects in Addis Ababa are exposed to variation orders. These variations are known to impact various aspects of the projects. The
study investigates the various causes of variation orders on public building projects in Addis Ababa. To achieve the study objectives,
through a comprehensive study of literatures review 38 common causes of variation orders were identified. A desk study, interview
and questionnaire survey were carried out to identify the causes of variation orders. The desk study conducted on five selected public
building projects and the causes of variation orders were identified. Interviews were made with selected experienced public building
project participants for expert opinion. The questionnaire responses were analyzed using the relative index method. A triangulation
method on the desk study, survey and the literatures was done to improve the validity of the findings from the study. The results
indicated that design changes, incomplete contract documents, impediment in prompt decision making process, inadequate working
drawing details, and change in specifications were the main causes of variation orders on public building projects. The study
concluded based on the findings of the research and recommendations were forwarded to minimize the occurrence of variation on
public building projects in Addis Ababa.
Key words: Variation order, cause, public projects, Addis Ababa

1. INTRODUCTION
The construction industry in Ethiopia has been on fast growing mode which plays an instrumental role in the country development.
Addis Ababa in the last ten years experienced a huge volume of work in the field of constructions. Large and complex government
buildings have been built, attracting domestic contractors and construction companies from all over the world. This situation coupled
with inexperienced consultants and the client has led to inadequate design resulting in many changes to plans, specifications, and
contract terms which resulted in variation orders. Variations and conflicts in construction projects, at work, and even in our daily lives
are very common (Arain and Pheng, 2006). Variation orders have an impact on overall project performance (Ruben, 2008). This is
because variations can cause substantial adjustment to the contract duration, total direct and indirect cost, or both. In most cities of the
country like Addis Ababa where new infrastructure and buildings are being built, the occurrence of variation orders on public projects
seems usual. Due to general background of the problem in the construction industry and the specific problem within the public
buildings, there is a cause for a study to investigate the impact of variation orders on public building projects in Addis Ababa.

2. LITERATURE REVIEW
There is no single definition of what constitutes a variation. The term „variation‟ as described and/or defined by various standard
forms of contract differs from one to another but in principle the definition and/or meaning is more or less similar. Usually, any
standard form of building contract will contain a definition of a variation in terms of specific actions and activities. The building
contract dictionary defined variations as alterations, additions or omissions in work, materials, working hours, work space, etc. As
defined in PPA (2006) conditions of contract, “variation” is an instruction given by the engineer, which varies the works. According to
FIDIC (1999) conditions of contract, “variation” means any change to the works, which is instructed or approved as a variation.
Various authors had identified different causes of variation orders in construction projects both on the private and public projects.
Contractual clauses relating to variation allows parties involved in the contract to freely initiate variation orders within the ambit of the
scope of the work without alteration of the original contract (Ruben, 2008). But variation orders are common in construction projects,
and improved understanding would require identifying their causes. The works of many researchers show that that variation has come
to stay as part of the construction projects and it cut across various stakeholders. According to Sunday (2010), the main causes of
variation orders on construction projects are inadequate working drawing details, design discrepancies, conflicts between contract
documents, the change of plans or scope by owner, impediment in prompt decision making process, inadequate project objectives, and
replacement of materials or procedures, differing site conditions, shortage of skilled manpower, contractor‟s desired profitability and
contractor‟s financial difficulties. As Mohammad et al. (2010) identified, change of plan by the owner, substitution of materials by the
owner, change in design by the consultant, errors and omissions in design, and owner‟s financial problems are the main causes of
variation orders. Ming et al. (2004) noted that at a more detailed level, the causes of construction project variation are usually
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International Journal of Engineering Research and General Science Volume 4, Issue 4, July-August, 2016
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generated from either design or construction activities. The design generated causes include design changes, design errors, omissions
and operational improvements. Construction driven causes are often linked to the unsatisfactory site conditions that hinder good
workmanship, material handling and plant operation. Ssegawa et al. (2002) investigated the opinion of project parties regarding the
frequency of occurrence, causes, and originators of variation orders. The study found that additions and omissions are the most
common cause of variations in projects, which represented about 45.7% of all variation orders in building projects. As Ruben (2008)
found out, the most frequent causes of variation orders were change of schedule, specifications and design and errors in design and
inadequate working drawing details. Lots of studies are conducted to identify the causes of variation orders (Mohammad et al., 2010;
Arain and Pheng, 2006; Sunday, 2010; Ssegawa et al. (2002); Ruben, 2008; Thomas and Napolitan, 1994; Fisk, 1997). The main
causes of variation orders from the literatures are:

 Change of plans or scope

 Change of schedule
 Change in specifications
 Change in design
 Errors and omissions in design
 Inadequate working drawing details
 Non-compliant design with government regulations
 Impediment in prompt decision making process
 Unforeseen problems
 Replacement of materials or procedures
 Inadequate shop drawing details
 Lack of judgment and experience
 Financial problems
 Inadequate scope of work for one or more parties to the contract
 Design complexity
 Lack of communication
 Defective workmanship
 Design discrepancies
 Inadequate project objectives
 Long lead procurement
 Lack of coordination
 Fast track construction
 Ambiguous design details
 Unavailability of skills
 Weather conditions
 Lack of strategic planning
 Lack of knowledge of available materials and equipment
 Lack of involvement in design of one or more parties to the contract
 Non-compliant design with owner's requirement
 Health and safety considerations
 Lack of a specialized construction management
 Obstinate nature of one or more of the parties to the contract
 Differing site conditions
 Poor procurement process
 Conflicts between contract documents
 Value engineering
 Change in economic conditions
 Honest wrong beliefs of one or more parties to the contract
 Lack of required data
 Unavailability of equipment
 Unfamiliarity with or unawareness of local conditions
 Socio-cultural factors
 Change in government regulations
 Speculation on desired profitability
 Technology change
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3. Research Methodology
Due to the nature of data to be collected from the relevant parties for the study, a purposive sampling method was adopted to select
the population for the study. A combination of qualitative and quantitative approaches was used in the study. A desk study, interview
and questionnaire survey were carried out to identify the causes of variation orders on public building projects. A triangulation method
on the desk study, survey and the literatures was done to improve the validity of the findings from the study. The desk study
conducted on five selected public building projects and the causes of variation orders were identified. Interviews were made with
selected experienced public building project participants for expert opinion. The questionnaire responses were analyzed using the
relative index method. Qualitatively, the study focused to obtain the perceptions of public building construction stakeholders relative
to the causes of variation orders. The variables that identified from the literatures were quantitatively measured to determine the most
frequent causes of variation orders on public building projects.

The questionnaire was designed to gather data from professionals that were involved in public building projects in Addis Ababa. The
respondents were asked to rate the questions on Likert‟s scale of five ordinal measures as shown in Figure 3.1 below.

The ranking of the responses was by using Likert‟s scale of five ordinal measures which arranged in ascending order from 1 to 5. It
included a total of 38 required responses.

Ordinal scale of 1 to 5

1 2 3 4 5

Increasing degree of contribution from 1 to 5

Figure 3.1: Five ordinal measures by Likert Scale

The main approach used to analyze the data was by using the Relative Index (RI) technique. The responses were analyzed using the
Microsoft Excel software package. The analysis included ranking the factors in terms of degree of effecting. In the computation of the
relative index the following formula was used;

RI = (5n5 + 4n4 + 3n3 + 2n2 + n)

5 (n5 + n4 + n3 + n2 + n)

Where:

RI: Relative Index

n5, n4, n3, … : number of responding indices.

The Spearman (rho) rank correlation coefficient is used for measuring the differences in ranking between two groups of
respondents scoring for various factors (i.e. clients versus consultants, clients versus contractors, and consultants versus contractors).
The Spearman (rho) rank correlation coefficient for any two groups of ranking is given by the following formula:

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Rho ( cal) = 1– 6 x (∑di2)

N x (N2 –1)

Where:

Rho ( cal): Spearman's rank correlation coefficient;

di: the difference in ranking between each pair of factors; and
N: number of factors (variables).

The value of the Spearman (rho) rank correlation coefficient varies between -1 and +1. A correlation coefficient of +1 implies perfect
positive correlation, 0 implies no correlation and -1 implies perfect negative correlation.

4. Result Analysis and Discussion

This part of the paper analyses the data collected using questionnaires, desk study and interviews. The collected data from the
questionnaires were tabulated and analyzed according to their ranking on Relative Index (RI). Interviews from selected respondents
are presented, together with observations from desk study. The objective of this chapter is to identify the highest ranked factors for
discussion and to find correlation with findings from the interviews and desk study.

Result Analysis

Desk Study Result

During the study period, there were a total of thirty-eight (38) public building projects which were under execution in Addis Ababa
and twenty-eight (28) project samples are taken for the study. From this number five (5) completed projects in which variation orders
(VO) approved were selected for desk study in order to fully understand the causes and impacts of variation orders and to determine
what recommendations or strategies could be taken to minimize variation orders on public building projects. These projects were
100% completed and selected as a representative to the occurrences of variation orders of each of the public building projects. The list
of selected projects is as shown in Table 4.1.

Table 4.1: List of selected public building projects

Project Project Name Contract Amount V.O Percent of

Code (Birr) V.O (%)
(Birr)

Project A Sport Commission 51,931,227.89 8,284,485.09 15.95

Project B Education Bureau 60,343,438.45 4,091,699.06 6.78

Project C Police Commission 99,444,398.79 8,152,255.70 8.20

Project D Credit & Savings Institution 36,914,578.87 7,234,368.3 19.60

Project E Fire and Emergency Service 58,076,253.18 5,150,610.80 8.87

(Source: Addis Ababa Housing Development & Construction Bureau (2012)

The desk study findings showed fourteen (14) causes of variation orders. Due to the repetition, it was further syntheses to eight (8)
from the most to the least repetitive causes of variation orders to be used in questionnaire for the verification and validation process to
evaluate their degree of important. But all the eight causes were already the domain of the variables which identified from the
literatures review. Below is the document study finding of summary of causes of variation orders from the five projects contract
documents:

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 Design changes
 Incomplete contract documents
 Incomplete working drawings
 Errors in design by the consultant
 Design modification
 Non-compliant design with owner‟s requirement
 Lack of communication between the parties
 Lack of decision making process by the client

Interview Result

These interviews were made between selected construction industry practitioners who are currently involved in public building
projects focusing on their perceptions on variations orders. In total three interviews were conducted, namely with a senior project
supervision and follow up team leader (A) from the clients‟ group, a senior contract administrator (B) from the consultants‟, and a
senior project manager (C) from the contractors‟ group. The interview aimed at discovering the causes of variation orders on public
building projects. From the interview, sixteen (16) causes of variation orders were found. These variables were merged and checked if
they were out of the literatures in order to include them in the questionnaire. But more of them with the same meaning were the
domain of the variables identified from the literatures. The findings from the interview revealed that incomplete contract document,
design changes, change in specifications, errors in design, unforeseen conditions, design complexity, lack of communication and
coordination between the parties, lack of experience and of judgment were the causes which contribute to the occurrence of variation
orders.

Questionnaire Survey Result

The respondents were grouped into three major groups namely client, consultant and contractor. The returns from the three groups are
tabulated in Table 4.2 below which shows an average response rate. Out of 45 targeted responses, only 32 (71%) of them completed
and returned the questionnaire. Thirty one questionnaires from 9 clients, 4 consultants and 19 contractors were received.

Table 4.2: Questionnaire return rate

Number of Number of
Group Questionnaires Questionnaires Response Rate (%)
distributed Returned

Client 12 9 75

Consultant 5 4 80

Contractor 28 19 68

Total 45 32 71

Among the nine responses received from clients, seven (78%) of them were construction supervisors and follow-up engineers while
two (22%) were contract administrators.

Among the four responses received from consultants, three (75%) of them were resident engineers and one (25%) was contract
administrator. And among the nineteen responses received from contractors, eight (42%) of them were project managers, eight (42%)
of them were office engineers, three (16%) were quantity surveyors. Figure 4.1 below shows the composition of respondents by their
position in their organization.

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10%
23%
10% Supervisor
Resident Engineer
Project Manager
10% Office Engineer
26% Contract Administrator
Quantity Serveyor

26%

Figure 4.1: Position of respondents

All the respondents have different levels of work experience in building projects. It was observed that the majority of the respondents
from the clients have between five to ten years of experience. Majority of the respondents from the consultants have also between five
to ten years of experience. And about one half of the respondents from the contractors have less than five years of experience.

From the forty five (45) causes of variation identified from the literatures, only thirty-eight (38) mutually exclusive causes of variation
orders on building projects were used in questionnaire survey. A ranking system using the Relative Index (RI) method was calculated
to find the most significant factor for each section. The value of RI ranges from 0.2 to 1. The value 0.2 represents the lowest strength
and the value 1 representing the maximum strength. A correlation test is also done between different groups of respondents.

Table 4.3: Summary of correlation test on the ranking of causes of variation orders

Respondents Rho( cal) = 1 – 6x(∑di2) Relation of the

N x (N2 –1) respondents

Client Vs Consultant 0.999 strong

Consultant Vs Contractor 1.000 strong

Client Vs Contractor 1.000 strong

From the correlation table above, it can be concluded that there is a strong correlation between the attitudes of the respondents in
all the three groups. This means that most of the respondents have the same perception about the causes of variation orders.

From the questionnaires survey result, it was possible to rank the causes of variation orders combining the responses of all respondents
as shown in Table: 4.4 below. The most raked causes of variation orders by all respondents were impediment in prompt decision
making process, change in design by the consultant, and inadequate working drawing details dominate with the same value
(RI=0.669). Change in specifications and poor procurement process came next with equal value (RI=0.663). Errors and omissions in
design, lack of communication and unforeseen problems followed with the same value (RI=0.656) and then design discrepancies and
contractor's desired profitability (RI=0.650). Change in government regulations (RI=0.456) and health and safety considerations
(RI=0.425) were the least ranked causes of variation orders.

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Table 4.4: Frequency of causes of variation orders

Overall
Causes of Variation Orders RI Ranking

Impediment in prompt decision making process 0.669 1

Change in design by the consultant 0.669 2

Inadequate working drawing details 0.669 3

Change in specifications 0.663 4

Poor procurement process 0.663 5

Errors and omissions in design 0.656 6

Lack of communication 0.656 7

Unforeseen problems 0.656 8

Design discrepancies 0.650 9

Contractor's desired profitability 0.650 10

Lack of contractor's involvement in design 0.644 11

Change of plans or scope 0.638 12

Change of schedule 0.631 13

Lack of strategic planning 0.631 14

Contractor's lack of required data 0.613 15

Consultant's lack of judgment and experience 0.606 16

Conflicts between contract documents 0.600 17

Lack of consultant's knowledge of available materials 0.600 18

Consultant's lack of required data 0.594 19

Lack of coordination 0.588 20

Lack of a specialized construction manager 0.588 21

Differing site conditions 0.581 22

Unfamiliarity with local conditions 0.581 23

Non-compliant design with owner's requirement 0.575 24

Unavailability of skills 0.569 25

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Defective workmanship 0.569 26

Change in economic conditions 0.569 27

Design complexity 0.563 28

Honest wrong beliefs of contractor 0.563 29

Technology change 0.519 30

Non-compliant design with government regulations 0.513 31

Weather conditions 0.506 32

Inadequate project objectives 0.494 33

Honest wrong beliefs of consultant 0.469 34

Fast track construction 0.469 35

Socio-cultural factors 0.469 36

Change in government regulations 0.456 37

Health and safety considerations 0.425 38

Discussion

From the questionnaires, the desk study and interview, the common causes of variation orders on public building projects were
design changes and incomplete contract documents, which resulted from numerous additional works.

The first major cause of variation orders was change in design by the consultant. This could also be caused due to the client change of
mind. Design change is indeed one of the most causes of variation orders and this fact is supported by the interviewees and the
observations in the desk study. This similarly confirms with the literature review that design change was one of the major causes of
variation orders. Incomplete contract document was the second major cause of variation orders. This occurs due to the client or the
consultant work before tendering and it increases the project cost or schedule. Contract documents of most public projects done by the
clients and it could be difficult to prepare a complete document because they are busy of work. The third major cause of variation
order was impediment in prompt decision making process, which is due to lack of judgment by the client or the consultant. There is no
doubt that lack o decisions delay the project and causes the contractors to re-design the requirements, reschedule their works and
material procurement which would have an adverse impact on the project. Inadequate working drawing details was the fourth major
cause of variation order which is the out-come of the consultant. A well detailed working drawing is believed to decrease variation
orders. Most professionals argue that a detailed working drawing should be prepared before the tender stage.

The fifth major cause of variation order was change in specifications which confirms with the literature review and the interview. In a
design stage, it could be a failure to change the specification due to change of mind of the client or the consultant which results in
variation orders. Consequently change in specifications can be the major cause.

5. CONCLUSION AND RECOMMENDATIONS

The desk study of the five projects confirmed that the most frequent causes of variation orders on public building projects was
design changes. According to the interview made between three selected construction practitioners involved in public building
projects they pointed out that the main cause of variation orders was design changes. From the questionnaire responses, it was
concluded that impediment in prompt decision making process, change in design by the consultant, inadequate working drawing
details, change in specifications, and poor procurement process were the most important causes of variation orders on public building
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projects. From the findings of the desk study, interview and questionnaire, change in design, incomplete contract documents,
impediment in prompt decision making process, inadequate working drawing details, and change in specifications were the major
causes of variation orders on public building projects in Addis Ababa.

The recommendations of this study are as follows:

 The client should allow sufficient time to prepare an elaborately detailed project brief.
 Variations can be minimized if consultants produce a complete design.
 Direct communication among the project team is a key to minimize variations occur due to communication gap during design
and execution phase.
 Consultants should give sufficient time for planning and design phase, this will assist in minimizing variation orders due
design changes at construction stage.
 A detailed design would be able to exert control to unnecessary interference from consultants or other external influences.
 The consultants should prepare completed contract document before the tendering stage.
 Contractors should identify and inform the varied item of work to the client before the activity starts to reduce variations.
Because the client will have sufficient time to check the varied item in different perspectives to give work order at minimum
variations.
 There should be improvement in decision making process on the part of the client during project execution stage.
 The results of this research should help construction practitioners, policy makers and researchers in the field of construction
management.

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