Variation Order

A variation (sometimes referred to as a variation instruction, variation order (VO) or change order), is an alteration to the scope of works in a construction contract in the form of an addition, substitution or omission from the original scope of works. Lenders (and sponsors) are acutely aware that any variation in the scope of work in an EPC / FPTK is likely to result in a change – very often an increase – in the ultimate price of construction. Lenders therefore typically seek to ensure that the initial scope of work is fully specified, so that the risk of variations is reduced to the minimum.