Managing variation order in Majlis Amanah Rakyat(MARA) 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 was done for three (3) projects on building construction project in Majlis Amanah Rakyat (MARA) during the period of Eight Malaysian Plan from 2001-2005. The objectives of the study are 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.