Overall Ranking of the Most Influential Causes and Impacts of

Variation Orders in Arab Construction Projects

Nehal Elshaboury

, Youssef Mohamed

and Ahmed

Elsaid

Construction and Project Management Research Institute, Housing and Building National Research Centre, Giza, Egypt

Construction Engineering Department, British University in Egypt, Cairo, Egypt

Keywords: Variation Order, Construction Projects, Influential Factors, Overall Ranking.

Abstract: Variation order involves adding, omitting, or altering activities from the original scope of work. It has a

multitude of negative impacts on the project’s duration and budget. The objective of this research is to

investigate the main causes and impacts of variation orders in Egyptian construction projects from the

perceptions of contractors, consultants, and owners. The relative importance indices of these factors are

computed by analysing thirty-three questionnaire surveys. Furthermore, the rankings of this study are

aggregated with other studies to determine the top five factors affecting and resulting from variation orders in

many Arab countries. The results showed that the most significant cause and impact of variation orders are

change in the country’s economic conditions and delay in project completion, respectively. This study aids

project managers and construction practitioners in identifying the root causes of variation orders to mitigate

and eliminate their negative impacts on the construction projects.

1 INTRODUCTION

The construction industry is one of the largest sectors

which plays a major role in the Egyptian economy.

Furthermore, the construction sector has a remarkable

contribution to the employment growth (El-Sadek,

2016). Therefore, this sector is a basic building block

in the development of any country. The occurrence of

variation orders has become inevitable in any

construction project and the magnitudes of their

impacts vary from one project to another (Assbeihat

and Sweis, 2015; Wali and Saber, 2019).

Construction projects are often subjected to several

changes that might result from the involvement of

many parties in a project. This variation is either

regularized by the issuance of a change order which

describes its scope and impact or turns into a claim or

dispute which curtails the successful completion of a

project (Alaryan, 2014).

Several definitions were given to the term

change/variation orders. The variation order was

defined as an added or deleted work from the original

scope of work and it may affect the project’s budget

and duration (Ibbs, 2001). Osman et al. (2009)

defined variation orders as any change from the

defined scope and schedule of work. The variation

orders are generally unwelcomed by the project

parties such that the owners feel that they are paying

for others’ mistakes and contractors believe that they

disrupt the workflow and require additional efforts

and time. However, some contractors might benefit

from the occurrence of variation orders (Mohammed

et al., 2017).

The main causes of variation orders are listed as

follows: change in scope, schedule or specifications,

owner’s and contractor’s financial problems, poor

decision-making, obstinate nature of the owner,

change in design, conflicts among contract

documents, project complexity, inadequate working

drawing details, unavailability of equipment,

shortage of skilled manpower, poor workmanship,

inadequate design, poor procurement process, lack of

strategic planning, inefficient communication,

improper and ineffective integration, and

environmental changes (Memon et al., 2014;

Lokhande and Ahmed, 2015).

Regardless of the different causes of variation

orders, they often result in delays in completion,

additional costs, adverse quality, rework, logistic

delays, and disputes among the project parties (Assaf

and Al-Hejji, 2006; Memon et al., 2014). Improving

the projects’ performances could be achieved by

reducing and eliminating the main causes of variation

Elshaboury, N., Mohamed, Y. and Elsaid, A.

Overall Ranking of the Most Inﬂuential Causes and Impacts of Variation Orders in Arab Construction Projects.

DOI: 10.5220/0010358003310339

In Proceedings of the 2nd International Conference on Applied Economics and Social Science (ICAESS 2020) - Shaping a Better Future Through Sustainable Technology, pages 331-339

ISBN: 978-989-758-517-3

331

orders (Thomas et al., 2002). Therefore, this paper

aims at identifying and ranking the most influential

factors affecting variation orders in many

construction projects across the Arab countries.

This research is organized as follows: Section 2

provides an extensive literature review of the

previous studies that were conducted in this research

area. Section 3 presents the proposed model’s

framework and its major components. Section 4 is

related to the model’s development that guides the

implementation of the proposed framework. Section

5 covers the data collected to develop the research

framework. Section 6 illustrates the model’s

implementation and reports a discussion on the

obtained results. Finally, section 7 summarizes the

main conclusions and findings of this research.

2 LITERATURE REVIEW

The variation orders might occur in construction

projects for many reasons, such as errors and

omissions, change in scope, and unforeseen

conditions (Hinze, 2001). Assaf and Al-Hejji (2006)

pointed out that change order was the most common

cause of delays in Saudi Arabia’s construction

projects. Alnuaimi et al. (2010) discussed the causes,

impacts, and remedies of variation orders in

construction projects in Oman. The authors

concluded that client changes and lack of national

information and databases were the main reasons for

variation orders. Besides, it was found that the

contractor benefited the most from change orders

followed by the consultant and then the client. In

another study, Ijaola and Iyagba (2012) conducted a

comparison of causes, effects, and remedies of

change orders in the public construction project in

Nigeria and Oman using the relative importance

indices. It was reported that additional work

requested by the owner and design modifications

were the most important causes of a change order in

both countries. Besides, claims and disputes as well

as time and cost overruns were listed as the major

impacts of change orders in Nigeria and Oman,

respectively. It was pinpointed that the contractors

were the party benefiting the most from the change

order. Finally, the most important remedies were the

assignment of a specialized quantity surveyor/ cost

controller and project manager to large construction

project and assignment of a high tech consultant

company in Nigeria and Oman, respectively. Alaryan

(2014) ranked the most common causes of changes in

the public and private construction projects in

Kuwait. Besides, the effects and control measures to

address these changes were discussed from the

perspectives of owners, consultants, and contractors.

The importance index of each effect and control

measure was utilized to rank the collected factors.

The agreements among the means of the responses

were verified using the hypothesis testing. The most

common causes of change orders were identified as

a) plan changes by the owner, b) scope changes by the

owner, c) site problems, d) design errors and

omissions, and e) poor design and working drawing

details.

Assbeihat and Sweis (2015) classified the factors

affecting change orders in public construction

projects in Jordan according to Drewin’s open

conversion system. The relative significance of these

factors was estimated based on the average scores of

responses received from the consultants, owners, and

contractors. The respondents stated that

modifications of design and specifications, additional

work, ambiguities and errors in specifications and

drawings, and inappropriate coordination among the

project parties were significant causes of change

orders. Finally, the solutions proposed to minimize

change orders leading to time and cost overruns were

recommended. In another study, Alshdiefat and Aziz

(2018) classified the causes of change orders in the

Jordanian construction industry into client-related,

engineering-related, and project-related aspects.

Then, the severity indices of these factors were

applied for ranking and analysis. The analysis showed

that the top three causes of variation orders were

changes requested by clients, design errors, and

conflicts between contract documents. Finally,

correlation analysis was performed to capture the

relationships between different categories of causes

of change orders. Lokhande and Ahmed (2015)

discussed the causes and impacts of change orders in

the construction industry of Yemen. The authors also

recommended some practices to manage and control

variation orders. Albhaisi (2016) surveyed the causes

of variation orders in the Gaza strip from the

perspective of owners, consultants, and contractors. It

was concluded that the most influential factors

causing variation orders were schedule change by the

owner, design complexity, lack of contractor’s

involvement in the design, late delivery of equipment

and materials, and site safety considerations. Finally,

the appropriate solutions to minimize and control

variation orders were proposed.

Senouci et al. (2016) investigated the causes of

change orders in residential and commercial projects

in Qatar. The level of association between these

causes and cost overruns was analysed using Pearson

correlation analysis. The analysis showed that design

ICAESS 2020 - The International Conference on Applied Economics and Social Science

332

errors, change in design, change in quantities of work,

change in plan or scope of work, and differing site

conditions factors had the highest correlation

coefficient. The analysis of variance revealed that

change orders in the design and construction phases

had the same cost overrun impact. A regression

analysis was performed to predict the cost overruns

concerning the project size/contract value. Finally,

recommendations were presented to tackle the

problem of change orders in the Qatari construction

industry. El-Sadek (2016) ranked the causes of

change orders in the Egyptian construction industry

based on their relative importance indices. The results

revealed that additional work, ambiguities and

conflicts in the contract documents, change of the

project’s schedule, and inappropriate communication

among project parties were listed as the most

significant causes of change orders. Finally, the

rectification methods that could be taken to mitigate

the probability of occurrence of variations were

presented. Sherif (2016) studied the causes and

consequences of variation orders in the repetitive

residential projects in Egypt. The relative importance

indices of these factors were computed to conclude

that change in plans or scope, schedule, and

specifications were the top three causes of variation

orders. Moreover, the level of agreement among the

responses of each party was measured using

Spearman correlation analysis. Finally, the non-value

adding activities associated with variation orders

were identified to enhance the construction projects’

performances.

Mohammed et al. (2017) identified the factors

causing variation orders in the building projects in

Sudan from the perceptions of owners, consultants,

contractors, and project managers. The weighted

average for each factor was computed to measure its

relative significance. The top five significant factors

were listed as follows: a) instable prices and exchange

rates, b) new imposed governmental regulations, c)

unavailability of manuals for construction projects, d)

design errors and omissions, and e) failure of owners

to make decisions or review documents at the right

time. The study showed an agreement among the

involved parties regarding the ranking of factors.

Khalifa and Mahamid (2019) studied the causes,

impacts, and remedies of variation orders in

construction projects in Saudi Arabia. The top five

causes of change orders from the contractors’ view

were: a) owner’s additional works, b) design errors

and omissions, c) lack of coordination among

construction parties, d) defective workmanship, and

e) financial difficulties faced by the owner. The

consultants agreed with the contractors on the top

three factors but, they ranked the owners’ financial

problems and differing site conditions as the third and

fourth causes of variation orders. Wali and Saber

(2019) applied the fishbone diagram to determine the

root causes of change orders in construction projects

in Iraq. Furthermore, an analysis of the collected

factors was performed using the relative importance

index. The analysis showed that the top five

significant factors causes of the change orders were

the poor project management, change in the country’s

economic conditions, lack of contractor’s experience

and mistakes during construction, poor cost

estimation, and quality assurance/control. This

research aids construction professionals in managing

and controlling the change orders.

The novelty of this research is the evaluation of

the significant causes and impacts of variation orders

in many Arabian construction projects from the

perspective of owners, contractors, and consultants.

This research is expected to assist project managers

and construction professionals in identifying the

causes of variation orders at an early stage of the

project for possible reduction or elimination.

3 RESEARCH METHODOLOGY

The flowchart of the proposed model is presented in

Figure 1. It starts with reviewing the previous

research studies related to variation orders in the

construction industry in many Arab countries. Then,

questionnaire surveys are conducted to rank the

collected factors based on their relative importance

indices. Finally, the obtained rankings are aggregated

to acquire a comprehensive view of the most

significant causes and effects of variation orders in

Arab countries.

4 MODEL DEVELOPMENT

The objective of this research is to investigate the

most influential factors of variation orders in the Arab

construction industries. The relative importance

index establishes a mean rating point for each cause

of variation order as per Equation 1 (Wali and Saber,

2019). Therefore, it is applied in this research for

evaluating the significance of the assessed factors.

Overall Ranking of the Most Inﬂuential Causes and Impacts of Variation Orders in Arab Construction Projects

333

Figure 1: Model development framework.

Where, W represents the rating of each factor, A

represents the highest weight, and N represents the

total number of responses. It could be noted that a

higher value of this index indicates the greater

significance of this factor. The different rankings

obtained from different studies are aggregated to

obtain a comprehensive view of the most significant

causes and impacts of variation orders in many Arab

countries using Equation 2 (Zidane and Andersen,

2018).

Wherere ORI represents the overall ranking index, F

refers to the total number of research studies, i

represents the actual ranking of each variation order

cause, and Ni represents the frequency of each

factor’s ranking in all the research studies. It could be

noted that a higher value of this index indicates a

higher ranking of this factor.

5 DATA COLLECTION

The major sources of data collection in this research

are literature reviews and questionnaire surveys. The

preliminary list of variation order factors in

construction projects was identified based on an

extensive literature review. The collected factors are

evaluated by conducting thirty-three questionnaire

surveys among different contractors, consultants, and

owners in the Egyptian construction industry.

The structure of the questionnaire consists of three

parts: consent form, general information, and

questions about causes and impacts of variation

orders. The informed consent form informs the

participant about the purpose of the study and the

benefits of participation. The general information

section covers the participant’s occupation and years

of experience. The experts are finally requested to

state the relative weights of importance of the factors

collected from the literature review. The experts shall

express their preferences according to Likert scale,

ranging from “1”, which means not at all important,

to “5”, which means very important. The rankings of

the top five causes and impacts of variation orders in

many Arab countries are shown in Tables 1 and 2,

respectively.

6 RESULTS AND DISCUSSION

The construction industry is exposed to several

changes leading to the issuance of variation orders.

That is why, it is crucial to investigate the causes of

variation orders in order to manage and control their

negative impacts on the projects. The common causes

and effects of variation orders are mainly collected

from the literature review. These factors are

evaluated by conducting thirty-three questionnaire

surveys with experts in the Egyptian construction

industry. Measuring the reliability of this research is

crucial to ensure getting the same results if more data

is collected using the same procedure (Saunders et al.,

2009). The reliability of the collected responses is

measured by measuring the Cronbach’s alpha

coefficient. The value of this coefficient ranges

between 0% and 100% whereas, the higher values

represent more consistent values and reflect greater

reliability. In this research, the Cronbach’s alpha

coefficient of causes of change orders is 0.98, which

means reliable and consistent results. The frequencies

of importance levels of each cause and impact of

variation orders are shown in Figures 2 and 3,

respectively.

ICAESS 2020 - The International Conference on Applied Economics and Social Science

334

Figure 2: Frequencies of importance level for causes of

variation orders.

Figure 3: Frequencies of importance level for impacts of

variation orders.

The relative importance index of each cause of

variation order is computed as shown in Figure 4. The

analysis shows that the top five most significant

causes of variation orders are financial difficulties

faced by the owner, unavailability of a strategic plan,

change of schedule of work, unclear working

drawings, and financial difficulties faced by

contractors. On the other side, the least ranked factors

are the change of specifications of work by the

consultant, non-involvement of contractor in the

design phase, adverse weather conditions,

replacement of materials, and change in site

conditions.

Figure 4: Relative importance indices of significant causes

of variation orders.

The relative importance index of each impact of

variation order is computed as shown in Figure 5. The

analysis shows that the disputes and conflicts, delay

in project completion, cost overrun, bad quality of

work, and rework are the most significant impacts of

variation orders.

Figure 5: Relative importance indices of significant impacts

of variation orders.

The overall ranking indices of the top five most

important causes of variation orders are illustrated in

Figure 6. The analysis shows that the top five most

significant causes of variation orders are change in

the country’s economic conditions, change of project

scope and plans, design errors and omissions, and

design modifications. On the other side, the least

important factors are modification in specifications of

materials, incomplete design, contractor’s financial

problems, unsafe site, and change in design by the

consultant.

Overall Ranking of the Most Inﬂuential Causes and Impacts of Variation Orders in Arab Construction Projects

335

Table 1: Rankings of top five casual factors of variation orders in different Arab countries.

ICAESS 2020 - The International Conference on Applied Economics and Social Science

336

Table 2: Rankings of top five impacts of variation orders in different Arab countries

No.

Country Oman Kuwait Jordan Palestine Egypt Sudan

Authors Impacts

Ijaola and

Iyagba

(2012)

Alaryan

(2014)

Msallam et

al. (2015)

Staiti (2015)

Sherif

(2016)

Mahmoud

and

Elshaikh

(2019)

Delay in project’s

com

letion

1 3 1 1 1 3

2 Claims and disputes 2 3 2 4

3 Cost overruns 3 1 2 2 3 2

Delay in activities’

com

letion

Increase in overhead

enses

Difficulty of adopting

new technolo

ies

7 Delay in payments 4 4

Bad performance and

al of

ties

4 5 5 4 1

9 Demolition and rework 5

Additional cost incurred

y the contracto

11 Poor quality of work 6 5 5

Figure 6: Overall ranking indices of the top five causes of

variation orders.

The overall ranking indices of the top five most

important impacts of variation orders are illustrated in

Figure 7. The analysis shows that the top five most

significant impacts of variation orders are delay in

project completion, cost overruns, claims and

disputes among project parties, adverse impact on the

performance and moral of parties, and poor quality of

work. On the other side, the least important factors

are demolition and rework, delay in completion of

activities, excessive overhead expenses, difficulty in

adapting new technologies, and incurrence of

additional costs.

Figure 7: Overall ranking indices of the top five impacts of

variation orders.

These results were validated through an interview

with a professional whose experience is more than 25

years in the Egyptian construction industry. The

expert was asked about the most influential causes

and impacts of variation orders in the Egyptian

construction industry. The most influential causes of

variation orders were stated as follows:

 Change in the country’s economic

conditions because of the instable economic

situation in Egypt.

 Design errors and omissions which generate

variations and adversely impact the project’s

cost and schedule.

 Change of project scope and

modifications/alterations due to insufficient

Overall Ranking of the Most Inﬂuential Causes and Impacts of Variation Orders in Arab Construction Projects

337

owner's knowledge in the project and lack of

planning in the initial stages of the project.

 Change in design or specifications of the

project which frequently occurs in projects

where construction initiates before the

design is finalized.

On the other hand, the most significant impacts of

variation orders were described as cost and time

overruns, claims and disputes among project parties,

and poor quality of work.

7 CONCLUSION

This study investigated the variation orders in the

Egyptian construction industry. These factors were

analysed by conducting thirty- three questionnaire

surveys among professionals in the construction

industry. The significance of these factors was

determined by calculating the relative importance

indices of the collected responses. Furthermore, this

research explored the most important causes and

impacts of variation orders from previous research

studies in Arabian construction projects.

Furthermore, the most significant impacts of variation

orders were delay in project completion, cost

overruns, claims and disputes among project parties,

adverse impact on the performance and moral of

parties, and poor quality of work. This emphasizes the

importance of tracking the causes of variation orders

to mitigate their negative impacts on the construction

projects. This will lead to better planning and

management of resources, saving time and money,

and enhancing the projects’ performances.

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Overall Ranking of the Most Inﬂuential Causes and Impacts of Variation Orders in Arab Construction Projects

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