Management of variation order in Public Work Department Malaysia construction project

Abstract

Construction industry is frequently related with variation order and the project holders have to believe that no construction method is free of variation. A document review that was done on three (3) building and road construction projects in Public Works Department Malaysia during the period of Ninth Malaysian Plan from 2006-2010 shows the poor management of variation order and cost overruns. In line with the problem identified, this study is coming up with the several objectives such as to identify the causes of variation, the effect of variation on project performance and to identify strategies to minimize them. The method of this study involved literature review, document study, interview and questionnaire. Based on the literature review, there are eight root causes of variation are found to be design errors, client requirement, contractor proposed change, construction change, discrepancies between work and statutory, extra work, design change and plan deficiency. Meanwhile, the effect of variation order as found in the study are cost overruns, time overruns, professional relations, delay in payment, increase overhead expenses, procurement delay, additional payment for contractor, progress effected without any delay, poor safety condition, dispute among professionals and completion schedule delay