Change control and variations

Upon agreement to a budget change to the baseline, the project team will need to consider how to communicate or directly instruct the suppliers for the work identified.

On most contracts, a written instruction is presented to the supplier. This has the effect of notifying the supplier that the work is formally required, providing either an agreed cost and timescale for the work or an estimate of the budget and time, which may need to be agreed at a later date, subject to the type of contract.

This variation instruction can have many titles, for example:

• site instruction (SI);
• project manager's instruction (PMI);
• variation order (VO).

Many clients, consultants and contractors will have their own particular version of this instruction, which may have linkages to their own financial systems.

As a minimum, the standard form should include:

• the project title;
• the supplier and/or work package title;
• the variation number;
• information on or details of the instruction;
• any attachments supplied with the form;
• justification for the issue of variation;
• the issuing person, with the date of issue;
• an estimate of cost or agreed price (including an estimate of time);
• an approval section;
• a note on the distribution of the form (electronic or paper).

Of course, within any project, there may be a need for the project manager to issue a variation without any adjustment to the budget. There are many instances in which this may occur. For example, a supplier may be formally requested to carry out some work if another supplier has failed to deliver against his or her contract. In this case, it would be expected that the additional costs incurred would be recovered from the contractor who failed to deliver.