A familiar problem on construction projects is:

“Do the work now. We will sort out the variation later.”

The work gets completed.

Then the contractor submits the cost.

And suddenly the response is:

“Where is the approved variation?”

For contractors and subcontractors in Saudi Arabia, this can turn legitimate additional work into a serious commercial dispute.

The key is not simply proving that extra work was carried out.

You need to establish:

Instruction → Entitlement → Notice → Records → Valuation → Time Impact → Payment

What Is a Variation?

A variation is generally a change to the contracted works.

Depending on the contract, it may include changes to quantities, design, specifications, materials, dimensions, sequence, methodology, additional work or omission of work.

The exact definition will depend on the contract.

The Biggest Problem: Informal Instructions

Many variation disputes begin with an instruction given through:

• email;

• meeting minutes;

• revised drawings;

• RFI responses;

• WhatsApp messages; or

• verbal site instructions.

The contractor performs the work because the programme cannot stop.

Months later, the employer or main contractor argues that no authorised variation was issued.

Whenever changed work is instructed, immediately ask:

Who instructed it?

Did that person have authority?

Does the contract require a formal Variation Order?

What notice must be issued?

Do not wait until the monthly payment application.

“No VO, No Payment” — Is It Really That Simple?

Not always.

The answer depends on the wording of the contract and the circumstances.

However, relying on arguments after completing the work is much harder than protecting your position when the instruction is first received.

If you believe an instruction changes your scope, notify the other party promptly and make clear that you reserve your entitlement to additional cost and/or time.

Not Every Extra Cost Is a Variation

A contractor may incur more cost than expected without having a variation entitlement.

For example, poor productivity or underestimating the resources required for work already included in the original scope does not automatically create a variation.

Always check:

• drawings;

• specifications;

• BOQ;

• scope documents;

• exclusions;

• clarifications; and

• contract conditions.

The first question is:

Was this work already included in my original scope?

How Should a Variation Be Valued?

The contract normally determines the valuation method.

A typical approach is:

Existing Contract Rate

If an existing rate properly applies to the changed work, it may be used.

Adjusted Rate

Where the work is similar but the quantity, circumstances or method of execution has materially changed, an adjusted rate may be appropriate.

New Rate

Where there is no suitable rate, a new rate may need to be built up using:

Labour + Materials + Plant + Productivity + Wastage + Overheads + Profit

Keep quotations, invoices, timesheets, delivery notes and plant records to support the valuation.

Do Not Forget the Time Impact

A variation can affect more than cost.

It may require:

• redesign;

• additional approvals;

• new materials;

• demolition and rework;

• resequencing;

• additional labour;

• additional plant; or

• extended site presence.

So every significant variation should consider two separate questions:

How much does it cost?

and

Does it affect completion?

A variation claim may therefore need to be linked with an Extension of Time or prolongation claim.

Seven Things to Record for Every Variation

Keep a clear record of:

1. Original contractual scope.

2. Instruction creating the change.

3. Contractual notice.

4. Revised drawings or specifications.

5. Cost build-up.

6. Programme impact.

7. Approval and payment status.

The earlier these records are maintained, the stronger the claim becomes.

Subcontractors Need to Be Especially Careful

Subcontractors often hear:

“Carry on. We will get client approval later.”

But the subcontractor’s contract is normally with the main contractor.

Check:

• who can instruct variations;

• notice deadlines;

• valuation rules;

• written-instruction requirements;

• back-to-back provisions; and

• time entitlement.

Do not rely only on the main contractor recovering the money from the employer.

Protect your own contractual position.

What If the Price Has Not Been Agreed?

Sometimes changed work cannot practically wait for commercial agreement.

If the work must proceed, record in writing:

• the instruction;

• that the work is additional or changed;

• that the price remains to be agreed;

• resources being used;

• costs being incurred; and

• any potential programme impact.

Good contemporaneous records can make a major difference later.

Five Common Variation Mistakes

1. Carrying out changed work without notice.

2. Relying only on verbal instructions.

3. Failing to prove the work was outside the original scope.

4. Submitting a lump-sum price without supporting build-up.

5. Claiming the cost but forgetting the programme impact.

A strong variation claim should clearly explain:

What changed? Who instructed it? Why is it a variation? What did it cost? What evidence supports it? Did it affect completion?

Have Unapproved or Unpaid Variations?

Many contractors and subcontractors carry out legitimate additional work but struggle to convert it into approved and paid variations.

PactWise Consulting supports contractors and subcontractors across Saudi Arabia with:

• variation and change claims;

• new-rate build-ups;

• contractual notices;

• EOT and delay claims;

• prolongation costs;

• claim preparation and review;

• contractual correspondence; and

• commercial and contract support.

If additional work is already being carried out without an agreed Variation Order, it is better to review the contractual position now rather than waiting until final account.

PactWise Consulting
Contracts. Commercial. Claims.