What does 'variation' refer to in contract administration?

In contract administration, 'variation' specifically refers to a change or modification to the original terms of the contract. Variations can arise due to several factors; for instance, project scope adjustments, changes in materials, or shifts in project delivery methods. These modifications might affect the project's schedule, costs, or quality, thereby necessitating formal documentation to ensure that all parties understand and agree to the changes being made.

Variations are critical within the contract management process because they help manage risks and expectations, ensuring that the contractual obligations can still be met despite unforeseen circumstances. Properly documenting variations allows for transparency and can help avoid disputes between the contracting parties, making it essential to have clear procedures for managing these changes throughout the contract lifecycle.