Contract administration

Variations that hold: documenting a change order properly

A variation is where a well-run contract most often becomes an audit finding. The order itself is rarely the problem; the missing justification and approval trail is.

A defensible variation file contains five things: the technical justification for the change, the contractual clause permitting it, the cost and time impact assessed against the original rates, the approval by the competent authority, and the amended BOQ or schedule.

Where any one of these is missing, the variation is questionable regardless of how sensible the change was. Where the cumulative value of variations approaches the threshold set in the contract or the rules, that threshold has to be checked and recorded before the next order is issued, not afterwards.

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