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Variation Orders/Change Orders

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Re: Variation Orders/Change Orders

Post  RJM on Mon Jul 14, 2014 1:15 pm

Id2013

I doubt if R 61(4)/2013 is limiting the variation order. If I am right, the regulation caters for the approval by the budget approving authority in the event that the increase is more that 15% of the contract price. To me, it implies that all variation orders other than what described under R 61(4)/2013 would be approved by the Tender Board as usual.

Dear forum members, one of the main problems of the procurement legislation is that it does not take into account time required to approve the variation especially when you put dimensions such as suspension cost, prolongation cost, loss of productivity etc. I am saying this because of the approval stages which are built in the law; tender board, budget approving authority & attorney general. How long will it take to get a single approval? How much are you going to pay for keeping contractor at site with his workforce idle? This is just one scenario

RJM

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Re: Variation Orders/Change Orders

Post  id2013 on Fri Jul 11, 2014 10:37 pm

KARUME wrote:Is there a limit on the value of variation or additional work compared to original contract sum?

Yes, there is limit in sense of looking the terms variation or additional works of which will affect the entirety contract price, and this may be referred to Rg 61 (4) of PPR 2013.

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Variation Orders

Post  KARUME on Thu Jun 26, 2014 9:26 pm

Is there a limit on the value of variation or additional work compared to original contract sum?

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Re: Variation Orders/Change Orders

Post  GWK on Thu Jun 05, 2014 8:01 pm

RJM,

Sorry, I differ with your idea that the main source of variation orders is the presence of variation order clause in the contracts. My previous submission in this topic illustrated that it is not possible to execute all activities in a works (especially road works) contract exactly as they appear in the original BoQ. There will be changes among the activities and at completion of contract, the consultant has to prepare the final account and the contractor prepares as built drawings. The variation can be -Ve or +Ve. Monies to cover for +ve variation are obtained from contingencies or Provisional sums included in the total contract value. The PPR2013, 243 (6) have provided the use of the fund as to cover variations in cost arising from any formula stated in the contract or additional services/works that are considered to be necessary by the PE.

Regarding "who initiates variation to the contract", the GCC (e.g for works) may be the contractor (through early warnings), the supervisor or the client (through the supervisor). There you can see that all three parties of the project can initiate the variation. What is important is the variation to be considered necessary by the PE for they are accountable to the public in general. Therefore, the variation must be approved by TB before implementation PPR 2013 110(3), must be submitted to PPRA within 7 days of issue PPR 2013 87 (3)(d).

Here again the three parts of the project are in the best position to control the variations for can not be implemented by the contractor before issued by the supervisor, and the supervisor can not issue the variation order before approval by the PE

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Re: Variation Orders/Change Orders

Post  RJM on Wed Jun 04, 2014 5:44 pm

GWK,

The problem is that the main source and problem of the variation/change orders in any contract is the presence of the Variation Clause in the contract. In absence of such clause there would no variations in the contracts - remove the clause, then, the problem is solved - the problem again is that this is not how the real world of contracts management operate.

Clients need to able draw a line between beneficial and detrimental variations in the contracts. And above all, whether variation is beneficial or detrimental,

(i)  who initiates variations to the contract?

(ii) who is in the best position to prevent or to control them?

RJM

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Re: Variation Orders/Change Orders

Post  GWK on Sun Jun 01, 2014 10:41 pm

RJM

I’m regretful that you are one of the practitioners accused by public and CLIENT for issuing changes during execution of a contract.

First, variation orders are not SIN if procedures are adhered as stipulated in say PPR 110 (quantity variation) and PPR 111 (Time variation) and in the conditions of Contract.

Second, Conditions of contracts provides a procedure to be followed when variations are necessary to be thought for the betterment of the contracts achievements. Example, for works it is clearly stated that the sum is estimate and the actual payment will be made against the measured works. In other words I can say that it is rare to complete the works contract without any variation/change of quantities in various activities. That is why is good practice for the project supervisor to prepare the final account of the project and the contractor required to submit as BUILT drawings.

Third, when necessary and does not prejudice the procuring entity, alterations may be of benefit to procuring entity, contractor/service provider and the general public as whole.

Last and very important; In light of provisions any practitioners should strictly adhere to the procedures including obtaining necessary approvals before issuing any variation order.

It is one year since you submitted this matter for discussion but please don't hesitate to clarify why your CLIENT is also one of those accusing you while he/she allowed that variation as provided in the Procurement regulation. (To my understanding Client is also the accounting officer). Did you seek all approvals before you issued the variation?

I remain

GWK

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Variation Orders/Change Orders

Post  RJM on Thu Apr 25, 2013 9:48 pm

L
There are general concerns from the clients and general public whether the variation orders/change orders issued during contract execution are adding value to the contracts or are wastes. Most of them if not all have gone far to describe change orders as the scheme for the practitioners to squander money in the contracts. In fact this perception has left practitioners and clients divided.

As one of the practitioners who is being accused by the general public and clients, the perception has left me with some questions unanswered -

1. Whether the Variation Orders are Sin or their Management is the source of the problem?
2. Is there anyone who has managed 100 contracts without variations order?
3. Who benefit from the Variation Orders?
4. What are the roles of the practitioners in processing variation orders?


Hoping that the above will stir the discussions in the right direction.

Welcome.

RJM

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