Key takeaways
- A variation is only a variation if it was instructed. Work you did because it seemed sensible is work you donated.
- Price the change against the contract's own hierarchy: BOQ rate first, then pro-rata rate, then star rate. Jumping straight to a star rate invites a rejection.
- Cost and time are separate claims. Winning the money and staying silent on the programme leaves you exposed to delay damages for the delay you were paid to cause.
- Notice periods kill more claims than pricing arguments do. A late notice can bar a valid claim entirely.
Nearly every project changes after the contract is signed. Drawings get revised, a client picks a different tile, a foundation meets rock nobody expected. The mechanism for handling that is the variation order — and it is the single most common place where contractors do the work and then fail to get paid for it.
The failure is rarely about the price. It is about process: the change was verbal, the notice went late, the rate was built the wrong way, or the time effect was never claimed. This article walks the sequence that keeps a change payable.
What actually counts as a variation
A variation is a change to the scope, quality or sequence of the works, instructed by the party the contract empowers to instruct it — usually the engineer, architect or project manager. Three tests have to pass together:
- It changes the contract scope. Not the method, not your productivity — the work itself.
- It was instructed by an authorised person. The client's brother-in-law visiting site is not authorised. Nor, usually, is a junior engineer.
- It is not already covered by a contract rate and the existing scope. Excavating deeper than shown is a variation; excavating the shown depth more slowly than you hoped is not.
What is not a variation matters just as much. Correcting your own defective work, absorbing your own inefficiency, and doing something the specification already required but the drawing failed to show — none of these entitle you to more money, however much extra they cost.
Get the instruction in writing — or write it yourself
Most variations start as a conversation on site. That is fine, as long as it does not stay a conversation. Standard contract forms require written instructions, and then provide a route for confirming oral ones.
The mechanism is the confirmation of verbal instruction: you write to the engineer recording what you were told, when and by whom, and stating that you are proceeding on that basis unless corrected within a stated period. Under FIDIC and most Indian and domestic forms, silence after such a confirmation is treated as acceptance.
This single habit — confirming every verbal instruction in writing the same day — resolves more disputes than any amount of contractual argument later. Memory fades and staff change; a dated letter does not.
The pricing hierarchy: use it in order
Contracts do not let you name any price you like. They set a sequence, and valuers expect you to work down it. Skipping to the bottom because it pays better is the fastest way to have a claim sent back.
| Order | Basis | When it applies |
|---|---|---|
| 1 | Existing BOQ rate | The varied work is the same item, same character, same conditions. Quantity changed; nothing else did. |
| 2 | Pro-rata / analogous rate | Similar work, derived from a BOQ rate with a documented adjustment — a different thickness, a different height, a different grade. |
| 3 | Star rate (new rate analysis) | No comparable item exists. Build it from first principles: material, labour, plant, overhead, profit. |
| 4 | Daywork | Work that cannot be measured sensibly. Recorded on signed daywork sheets, at contract daywork rates. |
The valuation hierarchy common to FIDIC, NEC and most Indian standard forms. Wording differs; the order does not.
One caveat that catches people out at level 1: a BOQ rate applies only while the character and conditions of the work are unchanged. If a quantity increase is large enough to alter your method — plant standing idle, a second shift, a different crane — you have grounds to argue the rate no longer applies, even though the item description is identical.
Building a star rate that survives scrutiny
A star rate is built the same way any rate is built:
Rate = Material + Labour + Plant + Overhead + Profit
Overhead is typically 5–10% of direct cost; profit another 5–15%. Use the percentages already implicit in your accepted BOQ rates — they are the hardest to argue with.
That last point is the practical trick. If you can show that your tendered rates carried 8% overhead and 10% profit, and your star rate carries the same, the valuer is arguing against the rates they already accepted. Pick fresh percentages and you invite a negotiation you did not need to have. The method is the same one behind every line in a BOQ.
Attach the backup: supplier quotations dated near the instruction, labour output rates, plant hire invoices. A rate with evidence behind it gets certified. A bare number gets queried, and every query costs a month.
Worked example: the extra 300 mm
A foundation is shown at 1.5 m deep. On excavation the soil is poor and the engineer instructs 1.8 m. The BOQ has an excavation item at 100 per m³ for depths up to 1.5 m. Footprint is 120 m².
| Item | Quantity | Rate | Amount |
|---|---|---|---|
| Extra excavation 1.5–1.8 m (120 × 0.3) | 36 m³ | 115 | 4,140 |
| Extra PCC and backfill | 36 m³ | — | 2,600 |
| Disposal of surplus spoil | 36 m³ | 60 | 2,160 |
| Direct cost | 8,900 | ||
| Overhead and profit at 18% | 1,602 | ||
| Variation total | 10,502 |
Currency units are neutral — substitute your own local rates. The structure is what matters.
Two things to notice. The excavation rate is 115, not 100: it is a pro-rata rate, adjusted upward because deeper excavation is slower and needs more support — and the adjustment is stated, not hidden. And disposal appears as its own line, because 36 m³ of spoil has to leave site whether or not anyone remembered to instruct it.
Now the part most contractors miss. That excavation held up the raft pour by four days. If those four days are not claimed here, they are gone — and worse, the delay they caused may later be charged to you.
Time and money are two claims, not one
An instructed change usually has two effects: it costs more, and it takes longer. Contracts treat these separately, and so must you.
- Cost is recovered through the variation valuation above.
- Time is recovered through an extension of time, which requires showing the delay affected the critical path — not merely that something took longer.
- Prolongation cost — site establishment, supervision, plant standing — follows the extension of time, not the variation. It is a separate build-up.
A variation claim that recovers the direct cost and stays silent on the programme is a half-finished claim. You have been paid for the work and simultaneously accepted the delay it caused.
Notice: the clause that ends most claims
Almost every standard form makes notice a condition. FIDIC 2017 requires a Notice of Claim within 28 days of the contractor becoming aware of the event, and states plainly that a late notice means the claim lapses. NEC uses eight weeks for a compensation event. Indian government forms carry their own, often shorter, periods.
These are not formalities. A perfectly valid, well-evidenced, correctly-priced claim can be worth nothing because the notice went in on day 30. Find the notice clause in your contract before you need it, write the deadline on the wall of the site office, and serve notice early even when the full cost is not yet known — the contract almost always allows particulars to follow.
Where variation claims go wrong
- Proceeding on a verbal instruction and never confirming it. The most expensive habit in the industry.
- Bundling many changes into one end-of-job claim. Late, unnoticed, and impossible to evidence. Price each change as it happens.
- Jumping to a star rate when a BOQ rate exists. It reads as opportunism and gets the whole claim scrutinised.
- Claiming cost but not time. Covered above, and it happens constantly.
- No contemporaneous records. Daily reports, labour returns and photographs written at the time carry weight; a reconstruction written six months later does not.
- Letting instructions accumulate unsigned. Keep a numbered site instruction register and reconcile it monthly against certified variations.
The pattern behind all six is the same: variations are won by routine paperwork done on the day, not by argument at the end. The records every contractor should keep exist largely for this moment.
Frequently asked questions
What is a variation order in construction?
A written instruction from the engineer, architect or project manager that changes the scope, quality or sequence of the contracted works. It creates an entitlement to have the change valued, and often to additional time.
Can I refuse to carry out a variation?
Usually not, if it is properly instructed and within the general scope of the contract. You can refuse work that falls outside that scope entirely — a different building, say — and you can dispute the valuation while still carrying out the work. Stopping work over a pricing disagreement normally puts you in breach.
What is a star rate?
A new rate built from first principles for varied work that no existing BOQ item covers. It is made up of material, labour, plant, overhead and profit, and should be submitted with supporting quotations and output rates.
How long do I have to give notice of a variation claim?
It depends on the contract, and you must check yours. FIDIC 2017 sets 28 days from awareness of the event and treats a late notice as fatal to the claim. NEC allows eight weeks for a compensation event. Many Indian forms are shorter still.
Does a variation automatically extend the completion date?
No. Extra time has to be claimed and justified separately by showing the change delayed the critical path. A variation that is absorbed by float generally carries no extension of time.