Computation for the total cumulative amount of positive variation order

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Computation for the total cumulative amount of positive variation order

Post by leodalguntas on Fri Jan 27, 2012 11:04 pm

hi. good day everyone. I would like to verify first and foremost the correct computation of the total cumulative amount of positive variation order if it exceed 10% of the original contract price as mandated under annex E of revised IRR of RA 9184. The formula given by the technical support of this office was that,

..............................................Total Amount of Positive + Total Amount of Negative
Total Cumulative Amount of................Variation Order................Variation Order
Positive Variation Order.......= ____________________________________________________ X 100%
...................................................................Original Contract Price

Note: pls. ignore the dots. =)

I have this dilemma of how to interpret this formula, do i have to sum up the additive and deductive amounts (derived from the added and deleted quantities of items included in the change order/extra work) and interpret it as the total amount of positive and negative variation order respectively? or do i have to consider the negative sign as for the negative variation order and subtract the amount from the total positive variation order? what if the total amount of negative variation order is greater than the amount of positive variation order, then i'll have a negative percentile as result?

thank you. i hope for your guidance in this regard.

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Re: Computation for the total cumulative amount of positive variation order

Post by engrjhez® on Sat Jan 28, 2012 2:50 pm

leodalguntas wrote:hi. good day everyone. I would like to verify first and foremost the correct computation of the total cumulative amount of positive variation order if it exceed 10% of the original contract price as mandated under annex E of revised IRR of RA 9184. The formula given by the technical support of this office was that,

..............................................Total Amount of Positive + Total Amount of Negative
Total Cumulative Amount of................Variation Order................Variation Order
Positive Variation Order.......= ____________________________________________________ X 100%
...................................................................Original Contract Price

Note: pls. ignore the dots. =)

I have this dilemma of how to interpret this formula, do i have to sum up the additive and deductive amounts (derived from the added and deleted quantities of items included in the change order/extra work) and interpret it as the total amount of positive and negative variation order respectively? or do i have to consider the negative sign as for the negative variation order and subtract the amount from the total positive variation order? what if the total amount of negative variation order is greater than the amount of positive variation order, then i'll have a negative percentile as result?

thank you. i hope for your guidance in this regard.

Positive variation (addition) shall bear positive (+) sign while the Negative variation bears negative (-) sign. When added algebraically, the sum must result to net positive variation (as assumed, or as usually to be assumed). This means all deletion of items and/or works must not be more than all additional items and/or works. If a negative sign will result, it will be unacceptable as there will be more deletion than addition in the original contract, which the government should not accept. Smile
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Re: Computation for the total cumulative amount of positive variation order

Post by Alpha on Tue Jan 31, 2012 5:32 pm

In my understanding, the revised IRR of RA 9184 limits the positive or additive variation order (v.o.) up to 10% of the original project cost. With regard to negative v.o., the extent of decrease in cost is not specific. There are instances that cumulative sum of v.o.s cover decrease in cost. I believe this is allowable.

The formula is correct; however, it would be better if the term "Total Cumulative Amount of Positive Variation Order" be changed to "Total Cumulative Weighted Percentage of Variation Order". As mentioned by engrjhez®, positive v.o. should bear "+" sign while negative v.o should bear "-" sign; otherwise, use this

..............................................Total Amount of Positive - Total Amount of Negative
Total Cumulative Weighted................Variation Order................Variation Order
Percentage of Variation Order..= __________________________________________________ X 100%
...................................................................Original Contract Price

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Re: Computation for the total cumulative amount of positive variation order

Post by leodalguntas on Thu Feb 02, 2012 9:54 pm

thank you guys for the insights.. =)

In my knowing, I still do not get the point of why the deleted works/decrease in quantity/deducted items should not be included in the 10% value taken as parameter for change done from what is originally contracted.

a variation order is needed if there is an increase/decrease in quantity or if there is a new item that is/are not included in the original contract.

if the cumulative variation order is computed and is beyond 10% but not beyond 20% of the original contracted amount the head of procuring entity can still let the variation order proceed provided however, appropriate sanctions will be given to the one who prepared the estimate and must be within the regulations to be provided by GPPB.

in my understanding, any movement done or change in that matter which is not in the original contract is subject to the parameter of 10% ceiling, if it goes beyond that then there is something wrong with the preparation of the estimate.. failure of the person who prepared.

because if changes done may it be additive or deductive from the original contract a ceiling of 10% is fair enough for the other contractors who are not awarded by the bid project.

I would suggest that the formula be revised and instead of using positive/negative variation orders the term additive/deductive variation orders is more appropriate if i have to consider summing up all the changes made from the original contract.

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Re: Computation for the total cumulative amount of positive variation order

Post by Recks1925 on Thu Feb 02, 2012 10:55 pm

Positive variation (addition) shall bear positive (+) sign while the Negative variation bears negative (-) sign. When added algebraically, the sum must result to net positive variation (as assumed, or as usually to be assumed). This means all deletion of items and/or works must not be more than all additional items and/or works. If a negative sign will result, it will be unacceptable as there will be more deletion than addition in the original contract, which the government should not accept. Smile [/color]

Sir if I may comment on this pls. I agree with summing up the negative and positive variation values to get the total VO%. Getting its difference can make a 50% deductive works with 50% additive works as 0% Variation Order. PE's project planners may connive with a bidder to quote low on a particular item of work since it'll be deleted anyway, and also to quote high on certain works because it will become an additive.



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