PROJECT VARIATIONS
Most projects have changes in scope from the original Contract documents. Even ZERO value changes should be confirmed.
At the start of the contract, Muli recommends that all Prime Cost and Provisional Sum allowances are handed back (one Variation) and individual variations passed for each item, thus the Project Manager has no Budget to commit until Client approval Variation is obtained.
The nature of project based industries is such that the value of a variation to the scope of works is often many times the gross margin to be made from the project.
Stringent processes covering a client’s variations and subcontractors’ amendments are vital in achieving effective management control and accurate financial reporting throughout the project’s life.
For variation management, Muli has adopted a framework of:
Ballpark Variations – raised once a change in scope of works is known
Submitted Variation – a firm $amount is submitted to the client for approval when the scope of works is quantified
Approved Variation – upon client approval
Muli requires an Approved Variation before allowing an increase in the Budget amount.
A provisional distribution of variations is permitted as follows:
expected outcome from budgets may be pre-entered
are shown on internal reports only
do not update the adjusted contract value
At the time of distributing a variation to a head contract you can flag updates to individual subcontracts.
enables the fast set up of a project that includes:-
Allocations and Trade Elements
Values allowed
