CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
The living standard in Nigeria generated many development opportunities in the manufacturing and building sectors. The satellite towns have accelerated as a result of high population growth. Large and complex projects have been built attracting contractors from all over the world. Most of these contractors appear to lack sufficient understanding of social, cultural and physical environment of Nigeria. This situation coupled with inexperienced consultants has led to inadequate design resulting in many changes to plans, specifications and contract terms. A construction contract is a business that is subject to variability Variation quality or quantity of the works as shown upon the contract drawings and described by or referred to in the contract bills. This includes the addition, omission or substitution of any (minor) work or the alteration of the type or standard of any materials or good to be used in the works and the removal from the site of any work materials or goods executed or brought thereupon by the contractor for the purposes of the works.
Variation as contained in the standard form of building contract in Nigeria (SFBCN) is defined as the modification of design or quantity of work as shown upon the contract drawings and described by or referred to in the contract bills. It includes addition, omission or substitution of any works. Its importance in the preparation of final account is further ascertained by Agbo (1993) who claimed that variations would occur in virtually every contract. Even though it could arise from the client, designers, contractors among other, the condition of the contract only empowers the Architect to issue variation orders, hence the attribution of variation in most cases to the Architect. Under clause 11.2 of the SFBCN, 1990 variations may arise under
- Circumstances that could not have been reasonably foreseen before signing the contract.
- Additional requirement by the employer.
- Compliance with government order or legislation.
- Correction of errors or omission in the contract drawings and contract bills.
- Non-availability of materials and goods specified in the contract.
- Substitution of materials, goods and workmanship specified in the contract.
Unfortunately, apart from the fact that any of these causes will affect the original contract sum, Udeh (1991) and Giwa (1988) submitted that consultants were in the habit of abusing the clause while for some it has become a face saving device for the inadequacies in their output especially design details, others are fond of issuing variation order so that their professional fees will also increase since a proportion of the fees is based on the final cost of construction. They further identified inadequate brief, design inconclusiveness, inadequate pre-contract planning, non-availability of materials labour specified for the work, unforeseen conditions and discrepancy between two or more contract documents and client’s intentions as the major factors causing variation.
Construction clauses relating to changes allow parties involved in the contract to freely initiate variation orders within the ambit of the scope of the works without alteration and substitution in the terms of the original contract..
Unfortunately, apart from the fact that any of these causes of variations will affect the original contract sum, Udeh (1991) and Giwa (1998) submitted that consultants were in the habit of abusing the clause while for some it has become a face saving device for the inadequacies in their output especially design details, others are fond of issuing variation orders so that their professional fees will also increase since a proportion of the fees is based on the final cost of construction. Between 1983-1998, 37 projects abandoned as a result of variation in contract prices, 27 as a result of cost escalation, 3 were because of corruption, 4 were to lopsided of foreign agreement and 3 due to political reasons. The 37 project initially awarded at a cost 2.55 billion were later revised upward to cost 5.55 billion representing an increase of 113.33% (Giwa). They further indentified inadequate brief, design inconclusiveness, inadequate pre-contact planning, indiscipline on the part of consultants, non-availability of materials labour specified for the work, unforeseen conditions and discrepancy between two or more contract documents. Seeley (1984) defined a framework within which the design team can issue variation instructions without prior reference to client. These include variation instructions that are unavoidable and essential for the contract to proceed; or variation urgently required. The design team should identify the cost of the proposed variation, the existing budget allowance, the nature of the variation and justification for it.
As quoted by S segawa et al (2002:89) argued that the spirit in which variation orders are permitted allows the contract to proceed without compiling another contract to cater for the changes. Most contracts make provisions for possible variations given the nature of building construction (Finsen 1999:109; Wainwright & Wood 1983:11). A degree of change should be expected since it is difficult for clients to visualize the end product they procure (Love 2002:19). Unforeseen conditions may arise which require measures that have not been provided for in the contract (Finsen 1999:109). However, the disadvantage of the variation clause is that architects tend not to crystallize their intentions on paper before the contract is signed because they know the variation clause will permit them to finalise their intentions during the term of the contract (Wainwright & Wood 1983:11).
An unfortunate aspect of the variation clause is that it tends to encourage to changes their minds and embark on building projects without having properly thought through their project requirements.
Consultants typically forget that issuing numerous variation orders result in higher construction costs. For example, a client who targets a completion date may want works to start on site while the design is still at a sketchy stage. In some cases, the construction works may overlap the design where the contractor will have to wait for the detailed design. As a result, some works are put on hold and others are subject to abortion or demolition. Arguably, the costs for aborted works are wastage of resources and are typically transferred to the client. They contribute to higher construction delivery costs. The construction industry does not grasp that the reduction of the occurrence of variation orders may optimally lower construction delivery costs. Cited by Ndihokubwayo R, and Haupt TC (1997). concluded that the greater the amount of change the greater the negative impact on both productivity and cost.
Variations and conflict in construction projects, at work and even in our daily lives are very common. Any addition, deletion or other revisions to projects goals and scope are considered to be variations. Whether they increase or decrease the project’s cost and schedule. Most commonly, lack of timely and effective communication, lack of integration, uncertainty, changing environment and increasing project complexity are the drivers of variations. Variations are inevitable in construction projects. Needs of the owner may change in course of design or construction. Market changes to the parameters of the project and technological developments may alter the design and of the engineer. The engineer’s review of the design may bring about changes to improve or optimize the design and the operations the project. Furthermore, errors and omissions in engineering design may force changes. All these factors and many more necessitate changes that are costly and generally un-welcome by all parties. Variations in constructions projects can cause substantial adjustment to the contract duration, total direct and indirect cost, or both Lee and Li (1998).
Any additions, deletions, or other revision to project goals and scopes are considered to be variations, whether they increase or decrease the project cost or schedule (Ibbs, et al., 2001). A degree of change should be expected since it is difficult for clients to visualize the end product they procure (Love 2002:19).Most commonly, lack of timely and effective communication, lack of integration, uncertainty, a changing environment, and increasing project complexity are the drivers of project variation (Arain, et al., 2004).:
- The addition, omission or substitution of any work
- The alteration of the kind of standard of any of materials or good to be used in the work.
- The removal from site any work executed or materials or good brought thereon by the contractor for the purposes of the work other than works materials or good which are not in accordance with this “contract OR the addition, alteration or omission of any obligation or restriction imposed by the employer in the contract bills in regard to:
- Access to the site or use of any specific part of the site,
ii. Limitation of working space,
iii. Limitation of working hours,
iv. The execution of completion of the work in any specific order.”
Variations in drawings and contract document usually lead to a change in contract price or contract schedule.
AIM AND OBJECTIVE
1.2 STATEMENT OF THE PROBLEM
In any construction project, it is very uncommon that variation will not occur, and this causes a lot of problems in meeting-up with the contract period as agreed in the condition of contract and as well affect the initial contract sum. This problem arises due to changes in specification and scope of works, initiated mostly by project owner/consultants
1.3 AIM OF THE STUDY
The aim of this research is to reveal the various variations caused by the consultants and rank them based on their frequencies as it affects building projects.
1.4 OBJECTIVES OF THE STUDY
- To indentify various types of variations caused by consultants
- To assess and rank each variations according to their severity of occurrences in projects
- Identify the initiator of the variations among the consultants.
1.5 NEED FOR THE STUDY
The aim of the research work is to reveal the various variations caused by the consultants in order to rank each based on their occurrence. The study will help the consultants know the level of occurrences of variations due to their actions, so as to plan very well for its reduction in any further projects. Understanding causes is vital to avoiding or reducing claims in the construction industry.
1.5 SCOPE OF THE STUDY
The scope of this research is centered on buildings projects where different variations caused by consultants from public and private clients.
1.6 LIMITATIONS OF THE STUDY
Data required for the research may not be available within the quantity surveying professionals and practices, therefore the need to encroach into neighboring professions.
