Variation order

A variation order is a written instruction changing the agreed scope of a shipbuilding or ship repair contract: an added system, a changed specification, or a deferred item. Under NEWBUILDCON and the yard forms, a variation order adjusts the contract price, the delivery date, and the guaranteed deadweight or speed in step with the change, and both parties must agree before the yard proceeds. Variations are the main route to cost and schedule growth on a newbuilding, so the contract caps the buyer’s right to demand changes and fixes how the price and delivery adjustment is calculated. Unauthorized work is at the yard’s risk.