How do you negotiate and resolve disputes over variations in construction projects?

Variations are changes to the original scope of work in a construction project. They can be caused by design changes, unforeseen site conditions, client requests, or regulatory requirements. Variations can affect the cost, time, and quality of the project, and often lead to disputes between the parties involved. How do you negotiate and resolve disputes over variations in construction projects? Here are some tips to help you manage variations effectively and avoid conflicts.

1 Understand the contract

The contract is the legal document that defines the rights and obligations of the parties in a construction project. It should specify how variations are identified, requested, approved, valued, and paid for. It should also include clauses on dispute resolution, such as mediation, arbitration, or litigation. You should read and understand the contract before starting the project, and consult a legal expert if you have any doubts or questions.

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2 Communicate clearly and timely

Communication is key to managing variations successfully. You should communicate with the other parties regularly and transparently, and document all communications in writing. You should also inform the other parties as soon as possible if you encounter any issues or changes that may affect the project. You should avoid making assumptions or verbal agreements that are not confirmed in writing.

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3 Use a variation management system

A variation management system is a tool that helps you track and control variations in a construction project. It can be a software, a spreadsheet, or a paper-based system. It should record the details of each variation, such as the description, reason, impact, approval status, and payment terms. It should also allow you to generate reports and invoices for variations. A variation management system can help you avoid errors, delays, and disputes.

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4 Perform a quantity take-off

A quantity take-off (QTO) is a process of measuring and estimating the quantities of materials, labor, and equipment required for a construction project. It can help you plan, budget, and monitor the project. It can also help you evaluate and value variations accurately and fairly. You should perform a QTO before and after each variation, and compare the results to determine the cost impact. You should use a consistent method and unit of measurement for QTO, and verify your calculations with the other parties.

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5 Negotiate in good faith

Negotiation is a common way of resolving disputes over variations in construction projects. It involves discussing the issues and interests of the parties, and finding a mutually acceptable solution. You should negotiate in good faith, which means being honest, respectful, cooperative, and reasonable. You should also be prepared, flexible, and creative. You should focus on the problem, not the person, and avoid blaming or accusing the other party.

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El Beye - Climate Finance Catalyst - Indigenous Forests

Mobilize Catalytic Capital by Linking Supply (Global South) with Demand (Global North) to increase Nature-based Solutions financial flows. Climate Fintech Startup for Water & Trees - Benefit people & planet w/ROI -
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Variations or should we just call it what it is…change orders occur anytime additional work is required to complete the project. The operational word here is additional since this supplementary work is not included in the original contract. Now the contractor has to demonstrate that the required change order is of no fault of their own (mistake, delay or error caused by contractor) but rather due to unforeseen circumstances, weather delay, permit delay, or other external conditions affecting project schedule/work. Upon presenting the change order to the owner, both parties evaluate the additional work (independently) to compare notes and agree on a course of action. The owner has to conduct their own takeoffs and pricing for comparison.

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6 Seek professional advice

If you cannot resolve a dispute over variations through negotiation, you may need to seek professional advice. You can consult a lawyer, an engineer, a quantity surveyor, or a mediator, depending on the nature and complexity of the dispute. They can help you understand your rights and obligations, evaluate your options, and represent your interests. They can also help you avoid or minimize legal risks and costs.

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El Beye - Climate Finance Catalyst - Indigenous Forests

Mobilize Catalytic Capital by Linking Supply (Global South) with Demand (Global North) to increase Nature-based Solutions financial flows. Climate Fintech Startup for Water & Trees - Benefit people & planet w/ROI -
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Change orders occur often in construction projects because unforeseen circumstances are a common reality for construction job sites.

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How do you negotiate and resolve disputes over variations in construction projects?

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1 Understand the contract

2 Communicate clearly and timely

3 Use a variation management system

4 Perform a quantity take-off

5 Negotiate in good faith

6 Seek professional advice

Quantity Take-offs

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