Construction Project - Contract Variation / Scope of work variation

[Former Member]

Hi All,

Contract variation = Variations to the agreed scope of construction work , as the changes are required to meet unforeseen circumstances .

I would like to know  how we can handle contract variation in Project systems for Construction Projects.

a) Process to record contract variation

b) Track cost on each contract variation

b) Show report on contract variation

As the original scope of work is recorded in Quotation and sales order . Does this mean that the SD team is responsible for this or it is the PS team .

Thank you in advance.

Frazer

[Former Member]

Hi,

Please see my replies as below.

1 Process to record contract variation:

Your base line Scope of Work (SOW) should be as sold and agreed by Supplier and Customer.

You will have your project structure basing on the base line Scope of Work (SOW). Create Project Version at that time before starting execution.

During execution of the project any changes either from internally or from Customer side can be recorded in Change Management process. From the Change Management document system you will be able to collect the changes and update your project structure. Again create project version at that point of time. Compare these two version which will let you know the contract variations with respect to SOW.

  2. Track cost on each contract variation:

Scope of Work (SOW) must have detailed cost plan supplied to you. So that would be your base line cost of project. You will have your project version at that point of time of the project and this will be used as reference document for future project versions. From the Change Management system, approved changes would let you know what is updated cost plan of project. Update your project with changes so that would be latest cost on the project and create project version. This is the one of the way to capture and record the cost variation on the project.

3. Show report on contract variation

You can review the project version in CN41N or CN41 or you can go with development of Zreports to satisfy your business needs.

The above changes can be tracked using Claim Management. Please read SAP help document on Claim Management to get more information.

One more thing, wanted to add here, without implementing Claim Management also you can keep track of the above requirements using Project versions.

Hope above makes sense.

Regards,

Sudhakar

Message was edited by: Sudhakar Pappu

[Former Member]

Normally the contract variation occured during contract execution will be handled by Projects team as it is something which is now part of project.

The variation occured during contract execution can be handled using claim management. The project team need to assess the impact of this variation on Project timeline,resources and cost and accordingly raise the claim notification and get it approved from related persons.

After the claim approval, the additional scope of work and related modification can be included in project scope.

Regards,

Mahendra