IACCM Contract Management Forum

« view all forum posts

ATCO Electric
2017-04-08 18:36:56

Change and Variation approval withdrawal

The owner representative sends email to authorize contractor to do work, requested by contractor as variation. The contractor completes the work. However, before issuing formal change authorization owner realizes the scope is within contract scope. Can he withdraw approval without repercussions.
 •  Seiersen Enterprises  •   2017-04-09 13:18:53
An interesting conundrum. Let us assume that the change order process has not been defined in sufficient detail to address this situation precisely.
It would appear that there is scope for negotiation of a mutually acceptable outcome. The most important thing is to discuss the issue openly, as it is unlikely that there is a hard and fast rule to fall back on.
This issue highlights the importance of post-award governance and relationship management.
 •   2017-04-11 05:50:54
The issue here is more of a matter of fact. Do you agree with the opinion of owner that the variation requested by you earlier is actually within the original scope of contract? If so, the matter ends there. Even if you do not agree but contract is clear that the so called variation requested is actually part of original scope, owner can always withdraw the approval (of variation) as the 'variation' was non-existent from beginning.

However if the contract is not clear and there is disagreement whether or not the work is a variation, then it boils down to negotiation on the scope of variation and its implications.

As Nicholas indicated in his reply, this issue highlights the need for clarity in scope of work (pre-contract stage) and post-award contract governance.
 •  Nigeria LNG Limited  •   2017-06-19 12:06:41
I agree with Nicholas and the other contributor.
If the Scope considered for variation had already been captured in the Contract it is clear there is no variation requirement. The issue if all about whether the scope in the contract was clear in the first place or the post-award contract governance was properly carried out.
 •  Kuwait Gulf Oil Company  •   2017-09-19 21:47:20
A variation order is to do change in time or scope frame and since the subject variation is already included in the scope then u can cancel the variation and in general you are only obligated by the variations after signing of both parties .
Replies: 4
Filter by category
Operations & Capabilities
Organization & People
Strategy & Management Tools