Pergamon

International Journal of Project Management Vol. 15, No. 4, pp. 263-267, 1997
1997 Elsevier Science Ltd and IPMA. All rights reserved
Printed in Great Britain
0263-7863/97 $17.00 + 0.00

PIh S0263-7863(96)00081-6

Identification and evaluation of

factors influencing variations on
building projects
A O Akinsola, K F Potts, I Ndekugri and F C Harris
School of Construction Engineering and Technology, University of Wolverhampton, Wulfruna Street,
Wolverhampton, WV1 1SB, UK

This paper identifies and quantitatively examines factors influencing the magnitude and
frequency of variations on building projects. The evaluation was based on the analysis of 46
completed building projects in the UK. The identified factors were classified into four main
categories: client characteristics, project characteristics, project organization and environmental factors. The findings of the study suggest that there is a relationship between these
factors and the magnitude and frequency of variations. Adequate attention given to these
significant factors at pre- and post-tender stages of the project should reduce the effect of
variations. 1997 Elsevier Science Ltd and IPMA
Keywords: Variations, project management, building contract, project control

Over the past few years the construction industry in the UK

has witnessed a steady fall in output due to the recession in
the economy. At present any inefficiency of the industry in
meeting cost and time requirements of its clients becomes
more and more evident, especially when the cost of borrowing money is high. Such concerns stimulated this
research and others to produce a series of reports, for
example the recently completed Latham report ~ where
variations were identified as one of the main problems
confronting the construction industry. "Variations", being
defined as the "modification or change to design after the
contract has been awarded", are likely to be a major cause
of disruption, disputes and claims.
In order to fully understand the resulting problem caused
by variations, firstly their source and nature need to be
understood, and why they arise. Secondly, it is necessary
to identify the factors influencing their occurrence. This
will lead to better management and control of those items
which are controllable and containment of those items which
cannot be controlled. The first issue was partly addressed
Bromilow 2, Hibberd 3, and McDermott 4 whilst the second
issue is the focus of this paper.

Factors influencing variations

Following a literature review four major factors categories
were identified as affecting a project's cost and time performance 5-9 namely; client characteristics, project characteristics, project organization and environmental factors.

Consequently, to test whether these factors also had an

influence on the incidence and magnitude of variations a
theoretical framework was developed.
The client characteristics
The client is the project sponsor or initiator, represented
sometimes by an individual or commonly an organization
commissioning a single building and possessing limited
knowledge of construction and limited funds through to a
large complex multinational organization with expert
knowledge of construction requiring new facilities. Clearly
the characteristics of building clients would differ in respect
of the nature of their business, whether private or public
and experience, where such factors could influence the
decision making processes and lead to variations 2'6'~. For
instance, a speculative property developer ordering or
approving variations after the contract award might be
aware of the cost impacts on the project, where other types
of client might be less aware.
The project characteristics
Construction projects are generally unique, accommodating
different designs, sites and construction methods. Each has
different characteristics influencing how the project is
initiated, designed, organized and managed and the final
outcome of the finished product 6m'~2. Hence type, size,
time duration, and complexity of the project may be
characteristics likely to influence variations.
263

Factors influencing variations on building projects: A 0 Akinsola

et al.

Project organization

Leisure

The organization of the construction process is dynamic in

nature, generating different contract strategies and organizational structures as well as styles of management reflecting
the amalgamation of specialists from different disciplines
with different objectives. Individual members of the team
have their own objectives and make contributions according
to their expertise and are often concerned with a discrete
functional part of the process 6. This can often create
problems of co-ordination and communication, affecting
variations in terms of number, agreement of cost/value and
if disputes arise how they are resolved. These organization
factors include: method of procurement, type of contract,
method of tendering, type of tender document used,
percentage of design completed before tender, design and
construction duration, adequacy of information, and
number of sub-contractors used.

Residenti
Industrial

dth

Education
Figure

The environmental factors

The term 'environment' describes all external influences
on the construction process 6. As Williams ~3 suggested
" a n organization is embedded in social, political, legislative, economic and technical systems which will influence
the strategy, structural systems and technology adopted".
A construction project, as a temporary organization, is also
subject to these environmental influences which Hughes ~4
identified as including: the economy, social, political and
technology elements.

RVM = TCV/construction duration (in months).

To examine the relationship between the variation measures
(i.e. TCV and RVM) and the factors, correlation analysis
was employed. Where all correlation coefficients of 0.20 or
over were considered significant at P <~ 0.10. Positive or
negative correlation coefficients indicates the direction of
the relationship. A positive coefficient means that increase
or decrease in value of the factor will result in increase or
decrease in variations, while the reverse is the case if the
sign is negative.

Results and discussion

The client characteristics influence in variations
Table 2 shows client types, broken down into individual
sectors, with the local authorities dominating the public
sector accounting for 32.6 % of the total projects considered

projects profile b y t y p e s and sizes

Project cost range

264

types

The prime aim of the data analysis was to establish whether

there is a significant relationship between variations and the
identified factors. Variations measured in terms of: (i) their
magnitude, i.e. the total cost of variations (TCV) ordered
per project and (ii) their frequency, i.e. the rate of variations
per month (RVM). TCV is based on the total cost of
variations contained in variation order sheets. A variation
order sheet may contain a number of works to be done,
each of which is a separate variation, summed to derive the
total cost of variation per project. While RVM is the measure
of the total cost of variations ordered per month, i.e.

Data for the study was collected from completed building projects in the UK using a structured questionnaire
designed with reference to the literature review stage. This
questionnaire was tested prior to the main study via a pilot
study using 16 projects to assess its suitability; some
amendments being necessary.
The main study comprised of 46 completed building
projects, with data structured into four sections. The first
comprised a general introduction about the respondent
organization and field of activity, the second--the principal
section--was designed to elicit information on single
projects chosen by the respondent as typical of their
organization's activity and completed within the last five
years, the objective being to gather information and data on
the identified factors and variations. The last two sections
sought to determine the perception of the respondents on
sources and nature of variation incidents observed and
the effectiveness of the variation clauses contained in the
contract.
The sample projects varied from offices to residential
buildings with costs ranging from 100,000 to over 50m
in value, the data profile by type being presented in Figure 1.

L e s s 1rn
1-5m
5-15m
15-25rn
25-50rn
Over 50m
Total

profile by project

Data analysis

Data collection

Sample

Sample

Distribution of the project by size and types are shown in

Table 1.

Research methodology

Table 1

Office

Industrial

Health

Education

Residential

Leisure

Others

1
2
11
1
1
-16

-1
3
-.
1
5

1
-1
1

6
3
1
--

5
1
---

1
-2
--

-1
-1

1
3

.
.

.
.

.
.

10

.
6

Factors influencing variations on building projects: A 0 Akinsola et al.

Table 2 Client type profile

% No. of Average

Client
type

Sector

Public

Local government
Central government
Nationalized industry
Developers
Companies

Private

projects

cost
(million)

32.6
15.2
2.2
21.7
28.3

2.26
24.22
0.28
20.34
8.12

TCV
RVM
(1000) (1000)
176
2462
25
1215
1591

8
65
5
54
99

with an average project cost o f 2.26m. While in the

private sector, developers accounted for majority o f the
private sector accounting for 21.7% o f the total projects
averaging 20.34m per project.
Distribution o f the projects according to the client
characteristic factors and measures o f variations presented
in Table 3 indicate that the magnitude and frequency o f
variations, on average, observed with private clients
projects exceeded public projects. This may, possibly, be
attributed to the cuts in public spending on new projects.
The results also suggest that inexperienced clients tended to
generate more variations. Examined further in Table 4 the
association between the factors and the variation measures
the results reaffirm the initial assumption that the factors
influenced the magnitude and frequency o f variations.

Project characteristics influence on variations

Analysis o f the number and value o f the projects studied by
type in relation to the average total cost and rate o f variations
are summarized in Table 5, where 'office buildings'
dominated, accounting for 34.8 % o f the total sample with
an average value o f over 11m. In contrast residential
buildings with an average value o f 611,000 had the least
value. In terms o f variations, industrial buildings have the
greatest value o f variations with an average total cost, for
each project, o f over 5m at an average rate o f 114,000
per month. While education buildings were the reverse with
an average total variation cost for each project at 90,000
at an average rate o f only 7000 per month.
Comparison results o f the project size with the extent o f
Table 3 Client experience profile
Client
type

Public
Private

Client

% No. of Average cost

projects

32.6
21.7

Project organization factors influence on variations

Table 9 illustrates that traditional methods accounted for
78.3 % o f the whole sample, with an average project value
o f 9m. While the least c o m m o n relates to management
contracting, at only 6 . 5 % , with average value of over
60m. However the management method generated far the
largest variations with an average o f over 6m at an
average spend rate o f 183,000 per month. In contrast, the
design build method generated the least variations. The
summarized data analysis results by contract types are
Table 6 Project size and variation measures

Project type

% No. of
projects

Less 1m
1-5m
5-15m
15-25m
25 -50m
Over 50m

Average
project cost
(million)

Average

0.50
1.68
8.89
25.50
46.10
93.25

30.4
17.4
39.2
6.5
2.2
4.3

Average

TCV

RVM

(1000)

(1000)

341
101
1261
2317
1566
8500

18
10
67
91
71
186

Table 7 Project complexity and variation measures

experience

Experienced
Inexperienced

variation is presented in Table 6, this table shows that the

majority o f the projects fell within the ranges o f 5 - 1 5 m
in value and accounted for 39% o f the total projects in the
study, the least being in the range 25m and over. Interestingly the magnitude and frequency o f variations seemed
to increase with the project size, for example, projects
valued over 50m generated the highest incidence and
magnitude o f variations. Whilst projects in the category
" l e s s than 1 m " showed the reverse. Projects variation
analysis by complexity as shown in Table 7 revealed that
both the total cost o f variations and their monthly rate
increase with the project complexity.
The correlation analysis results shown in Table 8,
emphasize a strong relationship between the project characteristics factors (type, size, complexity and duration) and
the two variation measures, i.e. magnitude and frequency
o f variations. This finding is supported by Bromilow ~5'16,
Morris ~j, Sidwell 6 and McDermott 4.

(million)

TCV

RVM

(1000)

(1000)

2.26
20.34

176
1215

8
54

Project

% No. of

complexity

projects

Less complex
Averagely complex
Highly complex

37.0
32.6
30.4

Average
Average
project cost
TCV
(million)
(1000)

1.31
5.90
27.11

588
742
2333

Average

RVM
(1000)

20
22
110

Table 4 Correlation of client characteristics with variation measures

CLient characteristics

TCV

RVM

Table 8 Correlation of project characteristics with variation measures

Type
Experience

0.42
-0.39

0.51
-0.35

Project characteristics

TCV

RMV

Type
Size
Complexity
Duration

-0.37
0.72
0.63
0.42

-0.42
0.59
0.66
0.18

Table 5 Project types and variation measures

Project type

Office
Industrial
Health
Education
Residential
Leisure
Other

% No. of
projects

34.8
10.9
6.5
21.7
13.1
6.5
6.5

Average
project cost
(million)

Average

11.07
29.49
12.57
1.73
0.61
5.29
30.20

Average

TCV

RVM

(1000)

(1000)

999
5237
461
90
715
849
837

68
114
14
7
37
59
12

Table 9 Procurement methods and variation measures

Procurement
method

Traditional
Management contract
Design build

% No. of Average
Average
projects project cost
TCV
(million)
(1000)

78.3
6.5
15.2

9.17
60.70
5.39

862
6383
514

Average

RVM
(1000)

37
183
57

265

Factors influencing variations on building projects: A 0 Akinsola et al.

Table 10 Contract types and variation measures
Type of
contract

Lump sum
Cost plus fee
Cost plus % fee
Fixed cost
Target cost

% No. of
projects

Average
project cost
(million)

Average
TCV
(1000)

Average
RVM
(1000)

63.1
4.3
6.5
23.9
2.2

10.35
120.0
1.16
5.18
8.60

863
9500
82
702
1800

40
266
7
34
150

Table l 1 Contractor selection methods and variation measures

Selection
method

% No. of
projects

Average
project cost
(million)

Average
TCV
(1000)

Average
RVM
(1000)

Open
Selective
Direct
Others

8.7
78.3
6.5
6.5

19.59
8.92
9.78
23.03

1922
1134
240
1522

34
52
12
57

Table 12 Correlation of project organization factors with variation

measures
Project organization

TCV

RMV

Design duration
% of design completed
Procurement method
Contract type
Selection method
Tender documentation
Adequacy of information
Construction duration
No. of sub-contract

0.48
-0.44
0.09
-0.20
-0.19
0.06
0.47
0.40
0.21

0.36
-0.42
0.24
0.11
0.14
0.23
0.38
0.16
0.35

Table 13 Correlation of environmental factors with variation measures

Environmental factors

TCV

RMV

Economy
Political
Technology

-0.20
-0.22
0.10

-0.22
-0.18
0.07

shown in Table 10, where the 'cost plus fee' contracts

(4.3 %) and 'target cost' (2.2 %) with an average value of
120m and 8.6m, respectively, produced the largest
variations. Thus, the two contract types were the least
dominants but generated the largest variations.
The data was further analysed by method of contractor
selection to determine whether this factor influenced variations. The results are shown in Table 11. The selective
tender method shows up as the dominant method (78%)
with average project values of 8.92m. However, the
largest variations were generated on project where the
'open tender' method of contractor selection were employed,
with variations costing an average of 1.9m. In contrast,
the direct nomination method generated the least variations.
In terms of the relationship between the magnitude and
frequency of variations and the nine organization factors,
only six factors were shown to have a significant correlation
coefficients (see Table 12).
Environmental factors influence on variations
Table 13 shows the summarized results of the correlation
analysis between the variation measures and the environmental factors, where only 'economy' and 'political' factors
were found to be related to variations. However these two
factors could have a significant impact and influence on the
other factors such as client characteristics and project
266

organization factors, resulting in a significant increase in

variations.

Conclusion
The four main factors categories, namely: client characteristics, project characteristics, project organization, and
environmental factors, were quantitatively analysed and
evaluated, and their influence on variations was statistically
established. The main findings of the paper can be summarized as follows:
Client characteristics, especially prior experience and
knowledge of construction project organization and the
production processes have a significant influence on both
the magnitude and the frequency of variations.
Project characteristics factors, such as type, size,
complexity and duration of the project have a significant
influence on the total value of variations and their
frequency.
Project organization factors, such as; design duration,
percentage of design completed before tender, procurement and contract type, adequacy of information provided, and number of sub-contractors, were found to be
significant and had an influence on variations.
While many are beyond the control of the project
manager/supervisor, careful exploration of each factors
could give an indication as to how to contain their influence
on variations. While variations on construction may be
inevitable, adequate planning and control can bring about
reductions, especially if contingency allowances for
variations and other unforeseen events in the budget are
realistic and sufficient to facilitate control during the
construction. Indeed, these factors when used as an input
variable for modelling could assist in determining the
required contingency allowances compared to the present
conventional method of arbitrary allocation which has been
proved unrealistic ~7-~9.

References
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Factors influencing variations on building projects: A 0 Akinsola et al.

13. Williams, A., Changing Culture: New Organisational Approaches
(1989), IBM Ltd.
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Construction Management and Economics, 1989, 7, 29-40
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Abiodun Akinsola is a researcher in

the School o f Engineering and Built
Environment at the University of
Wolverhampton. He obtained his
MSc in construction management at
Southbank University in 1993 before
joining the University o f Wolverhampton. His research interest is on
project management and computer
application.

Keith Potts is a principal lecturer and

the MSc Construction Project Management course leader at the University
o f Wolverhampton. He is the author of
Major Construction Works Contractual
and Financial Management (Longman,
1995) and is a member of the
Association for Project Management "s
Contract and Procurement Special
Interest Group.

18. Prasanta, D., Tabucanon, M. T. and Ogunlana, S. O., Planning for

project control through risk analysis: a petroleum pipeline-layingproject.
International Journal o f Project Management, 1994, 12 (1) 23-33
19. Akinsola, A. O., Potts, K. F. and Ndefugri, I., Variations on
construction projects: a review of empirical studies. Building
Research and Information, 1994, 22(5), 269-271
Issaka Ndekugri graduated in Civil
Engineering in 1977. After working in
industry, mostly on highways and
building projects, he undertook postgraduate studies in construction management in Loughborough University
of Technology. This was followed by
two years as Research Fellow in the
Department of Construction Management in Reading University. He is
currently a Principal Lecturer in
Construction Management in the
University of Wolverhampton where
his major research interests are in the
areas o f construction law, information systems and project management.

Frank Harris is the Head and Dean

of the School of Construction,
Engineering and Technology at the
University of Wolverhampton, having
previously spent over a decade with
Loughborough University running
Masters courses in the construction
areas. His research interests have
concentrated on construction productivity issues in contracts reaching 1m
mainly undertaken for the Engineering
and Physical Sciences Research
Council. Research supervision has
included Masters and PhD students
together with external examining in
other Universities. He is the author of Modern Construction and
Ground Engineering Equipment and Methods. He has co-authored
many books and published more than eighty papers in refereed and
professional journals.

267