Variations are an unavoidable aspect of your construction projects. Only a very few projects are being completed without any alterations enforced or requested. The apparent diversity of these variations could be harder for you and your team to predict beforehand, resulting in issues amidst the project’s lifespan.
Today, many companies hoped to raise additional revenue and profit from variations in awarded contracts. However, the plan is often backfired without the proper procedures, controls, and modern solutions like subcontractor scheduling software in place. That is why, as for your construction company, you need to be hands-on in every aspect of the projects and become more prudent with your finances at the same time.
We will share the different types of variations you will encounter and the five best ways to manage variations on your construction projects.
What are variations on a construction project?
Construction variations are considered one of the fallbacks, serving as a basis for a contractor like you to make changes from the original scope of the work. These variations can be in the form of substitution, addition, or complete elimination. A variation is a modification to the scope of the work being laid out on the construction contract.
If you are wondering why variations exist – they are the direct results of the complexity of your construction works, the huge number of moving parts, and some external forces that are beyond the control of you and your team.
- Design changes initiated by the continuous development of the plans tight after the contract has been submitted.
- · Preference changes directly from the client.
- Statutory changes around building heights, safety, materials, weights, and other elements of the project can impact the overall scope of the work
- Non-availability of the materials and supplies where the whole project hinges on thousands of moving parts
- Changes in conditions where your company do a great job at factoring in changes in economic and environmental conditions
Types of Variations that You Will Encounter
Since variations impact the scope of work and other aspects of your project, like cost and time, it is crucial to acknowledge different types of variations. See below:
1. Directed variation
A directed variation is often issued to you when your client demands to make a change. This type of variation may or may not affect the overall contract price or other aspects of the project. It is proven that directed variations are not complicated compared to the other two types since clients usually direct you to make changes with no other twists. Directed variations are a whole lot easier to deal with.
2. Constructed variations
On the other hand, constructed variations usually occur as the main result of non-owner-directed events that necessitate a variation. Unlike the first type, your clients do not demand you to make changes. Instead, you are forced to modify the scope outlined in the contract. In general, this type of variation is not easy to determine since they usually occur due to unexpected events.
Here are some examples of constructive variations:
- Deficient drawings and specifications
- Ambiguity in responses to information requests
- Different site conditions
3. Deductive variations (Implications)
This type of variation increases contract prices. This ongoing increase is due to increasing direct materials, labor, and equipment prices. However, the impacts of these variations are not limited to direct costs because other aspects can be affected. Remember that variations are a direct result of loss of efficiency.
Lack of efficiency can be fixed, especially when considering using task management software like Pro Crew Schedule. The lack of efficiency might be due to miscommunication, inconsistent updates, variations issues, etc. Only with this modern software tool can you properly manage any form of mishaps. It is designed for construction professionals about you and your team! You can request a live demo and experience it for FREE. Click here.
Ways You Can Ensure Variations Do Not Affect Your Project
1. Plan in advance
Actual revenue and forecast revenue are two different things that you should remember. It is also worth noting that the importance of thorough budgeting at the outset must not be overstated. Any discussions with your team and other parties involved should also be documented or recorded. Changes have to be recognized and incorporated into the next processes, rather than sharing it through conversation.
- Possible issues you and your team may encounter will vary from project to project. And when these variations could arise, you have to prepare for it as much as possible:
- What could happen if a third party cannot deliver necessary information, like surveys and sign-off documents?
- What happens if a continued period of bad weather conditions delays your project? Is there any project scope that can accelerate stages to catch up? Can you bring additional people to prevent projected overruns?
- Since variations can be hard to manage, are you considering deploying time-saving solutions and task management programs?
- Are all involved parties clear about what happens if an unusual on-site discovery holds up the actual schedule?
2. Check the figures as many times as possible
It may be challenging to track your project’s progress daily. However, this is the timeframe where cost variations occur, becoming much clearer to figure out. As a contractor, it is crucial to handle the cost variations carefully and know when they could happen.
Do not wait until an outdated and complicated spreadsheet is gathered from multiple sources by someone in your team who has limited info at their disposal. Because by that point, it might be too late to respond to the many changes in the profit margins and project’s costs.
3. Monitor the behavior of your subcontractors
Variations can be triggered and can happen when your subcontractor cannot honor the agreements, causing a scramble some works and leaving firms in a weaker position in terms of negotiating new deals.
Always check and monitor your subcontractor’s dealings and behavior. Do not allow things to happen where variations can be triggered. As someone who leads the team, mitigate the risks as quickly as possible. Train your crew members and orient them thoroughly about this matter.
The best way to track your subcontractors, including their work performance, activities, labor hours, etc. is through Pro Crew Schedule –an easy-to-use scheduling software tool designed to make work easier for all construction professionals, whether on-site or at the office. Master the art of construction crew management with the help of this cloud-based app. Make your team connect to this central platform consistently and seamlessly!
4. Be prepared for late costs
You already know that late costs can be the main sting on your construction projects. They often arrive at a particular time when many plans and considerations are already turning to the next contract. However, they often result from earlier issues and come to light as the construction project draws close.
If these costs are not determined and managed early in the project, your company’s profitability can be at stake. It can result from a job completed with higher costs or a complete loss.
5. Do not assume variations will deliver a profit
It is tempting to quote a low price for a construction project to ensure the work is awarded, even before entrusting the profit margin to possible variations. This approach that you are about to take is quite risky. You are gambling your project’s viability on certain events. Variations can have pros and cons, but more of the latter because they can be your worst enemy.
Ensure that any occurring variations are notified, passed, and cost as soon as possible. You can quickly input variations and track and manage them easily using project task management software. You are
Make Variations Manageable Using Construction Scheduling Software
It is essential to determine variations on time, mainly when these variations are constructive. If your projects have been affected significantly by multiple variations, employ the right project management software. Managing variations using this software solution is far easier and more reliable than spreadsheets, eliminating manually inputting data.
Pro Crew Schedule – the leading reliable software tool in the market today, can help you record jobs, track and compare costs, capture key project data, monitor your subs and teams, track inventory, etc. All that you ever need to manage and simplify every aspect of your projects and overall business is offered by this software tool!
Learn more about the benefits of Pro Crew Schedule, including its best features and how it can best help you get the job done. Get started with a 30-day trial for FREE!
There are many reasons why each variation you’ll encounter needs to be properly identified, documented and managed. The implications and effects of every variation that occurred indicate that something can either be right or wrong. That is why it is essential to spend time and effort to ensure that your variation claim is right.