A quantitative assessment of the cost and time impact of variation orders on construction projects

Purpose: Variation orders are a common occurrence in construction projects and their impacts have been studied by various authors. However, the contribution of project variations to construction cost and time overruns is yet to be established. The purpose of this study is to assess the significance of variations as a cause of cost and time overruns. Design/methodology/approach: Using a questionnaire survey, responses were obtained from 50 project participants on the causes and effects of project variations. Cost and time data were also collected on 30 completed building projects. The analysis used importance indices and F- and t-tests. The results indicated that variations had a significant effect and accounted for about 79 and 68 per cent of the cost and time overruns, respectively, for the projects studied. Findings: The results indicated that variations had a significant effect on project cost and time overruns and accounted for about 79 and 68 per cent of the cost and time overruns, respectively, for the projects studied. Project type and size were found to have no significant effect on the contribution of variations to cost and time overruns. The results also showed that changes in specifications and scope, initiated mostly by project owners and their consultants, were the most prevalent sources of variation. Originality/value: The results of this study indicates the cost and time significance of project. This will enable project owners, consultants, contractors and other stakeholders to better understand and appreciate the real impact of variations on project performance.