Modify Variation Request

There are two options for creating variation request:

  1. To add a new SPO line that must include a new scope of work for the specific SPO, or
  2. To make a modification in the quantity, amount, procurement rate, unit, or capped amount in the SPO line.

You can modify the quantity, amount, procurement rate or capped amount using the Variation tab in a SPO line. When a modification is done on the variation request, the status is set to Modified in the variation request. However, the status of the original SPO line does not change.

There are 3 variation types:

  • Omission: reducing the amount or the quantity in the SPO line if the Line Type is set to Amount Only or Quantity and Rate.
  • Addition: increasing the amount or quantity in the SPO line if the Line Type is set to Amount Only or Quantity and Rate.
  • Rate change: modifying the procurement rate in the SPO line with Line Type set to Quantity and Rate, and Rate Only.
    Note: For a Line Type Quantity and Rate, you can create two variation lines. One for the increase or reduction in the quantity and the other for the modification in the procurement rate. Else, one variation line can be specified in a SPO line.

Omission

Omission is the decrease of the amount for the Line Type Amount Only. The variation amount, which is the absolute amount is subtracted from the SPO line amount. The variation amount cannot be greater than or equal to the SPO line amount. If the AFPs linked to the SPO have the Assessed and Applied value available, the variation amount must not be greater than the Remaining AFP Amount in the SPO line.

Note: Omission is not applicable if the Line Type is set to Rate Only.

Omission for the Line Type Quantity and Rate:

The variation quantity, which is the absolute quantity is subtracted from the SPO line quantity and unit. The variation quantity cannot be greater than SPO line quantity. If AFP is processed for the SPO, the Variation Quantity multiplied with the Procurement Rate cannot be greater than the Remaining AFP Amount in the SPO line. The Variation Quantity must not be lower than the Remaining Quantity. A call off line cannot be created in a variation request. However, after the variation request is processed, you can modify or add call off lines in the SPO line.

Addition

Addition is the increase of the amount for the Line Type Amount Only. The variation amount reflects the increased value in the SPO line amount. For Addition, there are no limits in the amount that must be specified.

Addition for the Line Type Quantity and Rate:

To increase the quantity, you must set the Variation Type to Addition. For the SPO Line Type Quantity and Rate, the variation quantity reflects the increased value on the SPO line quantity and unit. For Addition, there are no limits in the amount that must be specified.

Rate Change

Quantity and Rate:

You can change the Procurement Rate and the Effective Date for the SPO line with the Line Type Quantity and Rate by creating a variation request with the Variation Type Rate Change. The new procurement rate can be higher or lower than the original procurement rate. The unit of the procurement rate is defaulted to the procurement rate unit of the SPO line. The Remaining Quantity of the SPO line cannot be lower than the remaining AFP quantity of the SPO line. The Effective Date cannot be specified to a date before the Assessment Date of the last active AFP. There can be only one rate change applicable for each variation request.

Rate Only:

If the SPO Line Type is set to Rate Only, you can change the capped amount. However, a variation line can only be created if you are modifying the procurement rate and capped amount simultaneously. The Effective Procurement Rate must be considered for both Capped Amount and Procurement Rate. In case, only the capped amount is modified, the new amount is displayed in the Capped Amount field in the SPO line. The new capped amount is taken into account when creating a new call off line or AFP line.

For the SPO Line Type Rate only, there are no limits in the new procurement rate if the call off lines does not exist.

New SPO line through variation request

You can add a new scope of work in a SPO by adding a new SPO line. You can create a variation request for the SPO line. You cannot add a variation line until the variation request is processed.

Impact on the original SPO and AFP:

After the variation request is modified, the SPO is set to Hold. AFP can still be created for the SPO without the modifications from the variation request until the variation request is processed. The Subcontractor can still request for payments and the contractor can assess the same work through the AFP. However, if the variation request is Open, the final AFP cannot be created.