Variations in a superyacht new build: how a change should reach the Owner.

A build contract describes a yacht at a moment in time. Over a long build, the Owner may want something different, the designers may refine a detail, the yard may propose another solution, and rules may change. Each of these becomes a variation when it changes what the contract says will be built, or what it will cost, or when it will be delivered. Moving a bulkhead, changing a layout or adding a piece of equipment are typical examples.

Credits for work removed, and items supplied by the Owner, follow the same path. Variations, credits and items supplied by the Owner are reviewed against evidence before the Owner approves them.

Not every request is a variation. Some work is already owed under the contract and the specification, and a request may only be asking the yard to deliver it. Checking which is which comes first.

A defect is different again. Work that does not conform to the contract is corrected by the yard, and it is recorded as a non-conformity rather than priced as a variation.

A request can come from several directions, and the register records each one with its origin.

Whatever the origin, the path is the same, and the Owner decides. A request from the yard is checked with the same care as one from the Owner.

The five steps below are illustrative. The procedure for each project follows the build contract and is agreed in the mandate, but the logic stays the same: each request is checked and explained before the Owner decides.

Once the Owner has approved the variation, it is written into a variation order that both the Owner and the yard sign. It usually states:

• what changes, with the drawings or the specification it replaces;
• the reference to the contract and to the yard’s quote;
• the change in price, and how it will be paid;
• the change, if any, to the delivery date;
• the effect on other work, where there is one.

A variation order that is silent on the delivery date leaves a question open for later. The Owner’s lawyers advise on the form the contract requires.

No. A proposal, a quote, meeting minutes or silence is not an approval. Approval is a written decision, with its rationale. The point matters most when a variation is discussed on site or in a meeting, where agreement can seem to have been reached without anything being signed.

Many build contracts set their own procedure for variations, with notices and time limits. The Owner’s lawyers advise on what the contract requires; the Owner’s Representative tracks that procedure and prepares each step in writing for the Owner’s decision.

ASYA prepares; the Owner decides. The Owner keeps control of the budget, the design choices, the variations, the payments, the contractual communications and acceptance.

Every variation, from the first request to its place in the budget, is kept in one register. A good register records:

• who requested the change;
• the reference to the contract and to the yard’s quote;
• the technical check of the scope;
• the effect on price and on time;
• the Owner’s written decision;
• how the variation enters the budget.

Each entry shows where it stands, from the request to the decision, so that pending variations are visible at a glance. The register is also the memory of the project. When a question comes up at delivery or in the warranty period, it shows what was changed, why and on whose decision.

The price of a variation is rarely only the work itself. A change can reopen drawings already approved, call for new approvals, delay work that depends on it or undo work already built. Each of these has a cost, and some appear only later.

A few practices help to limit these costs:

• decide while the drawings can still change;
• group requests, rather than sending them one by one;
• compare each request with the contract before accepting it as a variation;
• ask for the effect on time as well as on price;
• record every decision in writing.

An approved variation becomes a commitment in the budget, and a pending one is a cost that is forecast but not yet committed. Both belong in the forecast final cost, so the Owner sees where the project will finish, not only what has been spent.

The effect on time needs the same attention. A small change can delay other work that depends on it, so the review looks at the programme as well as the price. Where several variations touch the same area, they are reviewed together, so that their combined effect is seen before each one is approved. Pending variations and the decisions due are shown in the monthly report to the Owner.

At delivery, the approved variations, the credits and the items supplied by the Owner are reconciled with the contract price in a final account. A complete register lets that account be checked line by line. How the budget and the forecast final cost work, and how ASYA works through a new build.

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