Analysis of variations and its possible applications/implications for Hong Kong construction projects

Pao Yue-kong Library Electronic Theses Database

Analysis of variations and its possible applications/implications for Hong Kong construction projects

 

Author: Chan, Ming-kwan
Title: Analysis of variations and its possible applications/implications for Hong Kong construction projects
Degree: M.Sc.
Year: 2000
Subject: Construction contracts -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Building and Real Estate
Pages: viii, 86, [27] leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1559350
URI: http://theses.lib.polyu.edu.hk/handle/200/3657
Abstract: When we talk about Variations, many people will only focus on the contractual obligations and limitations of Architect in issuing instructions. Traditionally, many big QS firms in Hong Kong would prepare cost analysis for past projects as records and would use these analysis for estimating purpose but they seldom analyze the distribution of variations. This research paper carried out similar study as Choy and Sidwell did in Australia in 1991. It is found that the amount of variations is proportional to the size of projects and the average percentage of variations in a project is 13%. However, different types of project have different norms of variations. The result can be used in the cost control process. When the work packages are tendered, the residual contingency can be compared with the norm to see whether there is enough money to complete the project. Conversely, it can be used to estimate the final contract sums. The analysis on the distribution of variations derives the norms for different packages and can be used to increase the accuracy of the said calculations. It is also found that the about 75% of the variations in Hong Kong projects is originated from consultant and only 25% is originated from Client or due to unforeseen condition. That implies most of the variations are more predictable and controllable from the perspective of Risk Management. Therefore, the variation risks can be better managed by strengthening the control measures on the consultants. It is noticed that the Scope Change in a Contract is only 3-4% of the Contract Sum on average. It is therefore prudent to include it in the Guaranteed Maximum Price so that the prime advantage of GMP is not vitiated.

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