Glossary · also called Variation, Variation order, Extra item, Deviation

What is a Change Order (Variation) in Construction?

Change order: A change order, also called a variation, is a formal, approved change to the scope of a construction contract — added, omitted or altered work — together with its effect on price and, where relevant, time. Once the client approves it, the change becomes part of the contract and the work can be measured and billed in RA bills.

Definition

No construction project is built exactly as tendered. Clients change their minds, drawings are revised and site conditions differ. A change order records each change properly: what changed, why, its price and its time impact, and the client’s approval.

Indian contracts often distinguish between deviations (more or less of an existing BOQ item than the tendered quantity, sometimes paid at the contract rate only within a stated limit) and extra items (new work with no BOQ item, priced by rate analysis or agreement). The exact rules are in your contract’s variation clause.

How it works

An example, with illustrative numbers only:

The client asks for an additional water tank slab not in the BOQ.
The contractor prices it: 12 cum of RCC at an analysed rate of ₹9,400 = ₹1,12,800, plus 1,100 kg of steel at ₹78 = ₹85,800. Total ₹1,98,600, with a request for 7 days’ extension.
The change order is submitted to the client’s engineer, who reviews and approves it at ₹1,90,000 and 5 days.
The contract value rises by ₹1,90,000 and two new items are added to the contract BOQ.
The work is then measured and claimed in the next RA bill.

Common mistakes

Doing the work before approval. Unapproved work has no contract rate and is the hardest money to recover.
Billing extra quantity without a change order, which usually leads to the bill being held.
Ignoring time. A variation that adds work but not time can expose you to liquidated damages.
Not recording cost separately, so the true cost of the change is lost in the cost ledger.

In Zaptiz

In Zaptiz Construction, change orders are priced, reviewed, submitted to the client and update the contract once approved. RA bills warn when a quantity exceeds the contract BOQ, so extra work is pushed through a change order before it is billed.

BOQ
A BOQ (bill of quantities) is a document that lists every item of work in a construction project, with a description, unit of measurement and quantity for each. Contractors price it with rates to bid, and once a contract is awarded the priced BOQ becomes the basis for budgets, measurement and RA bills.
Rate analysis
Rate analysis is the method of working out the rate for one unit of a construction item — such as one cubic metre of concrete — by adding up the material, labour and equipment it needs at current prices, then allowing for wastage, sundries, overheads and profit. The result is the rate a contractor quotes against a BOQ item.
RA bill
An RA bill (running account bill) is an interim bill a contractor raises during a construction project for work completed so far. It records cumulative quantities against the contract BOQ, claims the value of work done since the previous bill, and is paid after the client certifies it and deducts retention, advance recovery and taxes.
Cost ledger
A project cost ledger is the running record of every cost on a construction project — material, labour, plant, subcontract and overheads — tagged to a cost head and phase. It separates committed cost, such as approved purchase orders, from actual cost incurred, so the project can be compared with its budget while work is still under way.

All glossary terms

What is a Change Order (Variation) in Construction?

Definition

How it works

Common mistakes

In Zaptiz

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