While reviewing a construction contract for a
Saudi Giga Project, the DisputeIQ team were reminded that one of the industry’s most persistent ambiguities still thrives: the blurred line between a Variation and a Claim. This particular contract made an intriguing inclusion — it defined a Variation to include “changes to the sequence or timing of the execution and completion of the Works.”
On paper, it’s a small detail. But in practice, it opens the door to a more strategic — and often overlooked — route to recovering time and money.
What’s often overlooked is how valuable this route can be. Unlike claims — which tend to be contentious, slow-moving, and burdened with evidential hurdles — Variations offer a more direct and structured path to securing additional time and money. Yet many contractors instinctively reach for the claim notice the moment they sense potential delay or disruption. In doing so, they may be missing a cleaner, stronger entitlement.
Tables Turned!
When treated as a Variation, the dynamics change significantly. The burden of proof no longer rests entirely with the Contractor. Instead, the Engineer is under an express contractual obligation to value the Variation. This valuation is not discretionary — it must be undertaken “as soon as practicable,” and it must rely on the rates and pricing mechanisms within the Contract, not a detailed forensic demonstration of actual loss. That distinction is critical.
This shifts the evidentiary and procedural weight off the Contractor’s shoulders. The commercial implications are substantial. It’s easier to recover interim payments. There’s less room for aggressive rejection. And you’re not stuck trying to piece together disrupted productivity records months down the line.
Be Wary!
But be wary. These sequence or timing changes are rarely offered on a plate. In fact, they’re often disguised in everyday correspondence or embedded within “coordinated” construction programmes. We frequently see them in documents issued under a covering letter that makes no mention of a Variation Order. In some cases, revised programmes are tied to nominated subcontract agreements with interface dates that are fundamentally inconsistent with the main contract schedule. The Contractor is then quietly expected to absorb the re-sequencing and adjust without resistance — despite the fact that the effect is commercially significant.
Forget the Form!
In such situations, it’s essential to look past form and focus on substance. If an instruction — however informal — compels the Contractor to depart from the originally agreed sequence or timing, then the definition of a Variation may already be satisfied, even if the word “Variation” is never used. Courts and arbitral tribunals typically adopt a “substance over form” approach. What matters is the effect of the instruction, not its label.
The practical problem is that Contractors are often hesitant to challenge these instructions, especially in high-profile Giga Projects where commercial pressure to comply quietly can be intense. That’s precisely why this contractual route is underused. But perhaps it’s time to ask why.
The mechanism exists. It’s relatively clear. And yet it’s rarely enforced in the Contractor’s favour. Could it be that Contractors have been too quick to resort to Claim procedures, unaware that a stronger entitlement lay under the Variation regime all along?
Terms like these — which treat timing and sequencing changes as Variations — are increasingly common across KSA Giga Project contracts. They present an opportunity not just to recover money and time, but to rebalance the dynamic. So why aren’t more Contractors exploiting it?
Practical Recommendations
- Read definitions carefully: If your contract includes sequence or timing in the definition of a Variation, don’t ignore it. It’s a potential game-changer.
- Scrutinise all instructions: Especially those wrapped inside updated programmes or interface agreements. Look beyond the formatting — focus on the operational impact.
- Notify accordingly: Respond clearly and promptly to any sequencing change that affects your works. Reference the Variation clause and state your intention to comply without prejudice to rights under the contract.
- Request formal recognition: Invite the Employer or Engineer to confirm that the change constitutes a Variation and proceed with valuation.
- Push for valuation, not validation: Remember — under the Variation path, you don’t need to prove loss. The Engineer must value the change using contract rates and accepted methods.
- Avoid defaulting to Claims: Don’t automatically treat sequencing delays or disruption as a claim. If the mechanism for Variation exists, use it. It’s faster, cleaner, and less adversarial.
At DisputeIQ, we believe Contractors need to get sharper at identifying where real contractual leverage lies. The Variation vs Claim distinction is more than academic — it defines who carries the burden, how compensation is framed, and how long it takes to get paid.
Next time your sequence or programme is flipped on its head, pause before reaching for that claim notice template. There might be a Variation already in play — and the burden may not be yours to carry.
davidbrodiestedman@dispute-iq.com
