By Doreva · Published 2 November 2026 · Doreva Articles

How to Manage Contract Variations: Scope, Costs and Approvals

“Can you just add this?”

Two extra sites. Another monthly report. A weekend visit that was never in the original schedule.

The request sounds reasonable. Your team wants to help. But before someone commits, you need to understand what the change means for the contract, your costs and the people delivering the work.

A contract variation changes the terms of an existing agreement. To manage one, check the agreed scope and variation procedure, assess the impact on price and delivery, obtain the required authorisation, and record the change. Then update the affected obligations, schedules and billing instructions.

For Australian government suppliers, a clear variation process helps prevent additional work from becoming an untracked cost or a disputed commitment.

What counts as a contract variation?

A contract variation may change the scope, quantities, locations, price, timing, deliverables or other terms of an agreement.

Examples include adding service locations, changing a delivery milestone, introducing a new reporting requirement or amending the agreed service hours.

Not every operational request requires a variation. The contract may already allow the buyer to order additional quantities or services through a defined process.

The first question is: does the existing agreement cover this request, including how it will be priced and authorised?

Business.gov.au explains that a variation clause sets out when and how parties can change a contract. Read it alongside any ordering, pricing and instruction provisions. Source: Prepare a contract

How do you check whether extra work is within scope?

Compare the request with the current agreement, including its schedules and approved variations.

A schedule of hourly rates may establish how work is priced. It does not, by itself, establish that the work has been authorised.

A seemingly small request can also create several obligations. An additional site might require travel, induction, equipment, separate records and revised reporting.

If the scope is unclear, document the question and seek clarification before making a commitment.

Who can approve a contract variation?

Approval depends on the agreement and the authority arrangements of both parties.

Your everyday client contact may be able to request a change without having authority to amend the contract or approve additional expenditure. Your own business may also require operational, financial or legal review.

Keep these decisions distinct:

• Delivery approval: can your team perform the changed work?
• Commercial approval: are the price, costs, timing and risks acceptable?
• Buyer authorisation: has the appropriate person authorised the change?
• Contract formalities: have the required signatures, notices and effective-date conditions been satisfied?

Commonwealth guidance recommends that variations be agreed in writing and signed by both parties. Follow the applicable requirements in your agreement. Source: Department of Finance — Contract Variations

An internal approval is one step. It does not establish the buyer's agreement.

What should a contract variation request include?

A useful variation request explains what will change and gives the decision-makers enough information to assess it.

Include:

• The contract reference and a unique variation number.
• Who requested the change and when.
• The current requirement and proposed amendment.
• The reason for the change.
• The effect on price, delivery dates and resources.
• Assumptions, dependencies and exclusions.
• Changes to reporting, KPIs or acceptance requirements.
• Required approvals and the proposed effective date.
• Supporting correspondence and the final agreed document.

Avoid descriptions such as “additional services as discussed”. Identify the work precisely enough for operations and finance to act on the same instruction.

Worked example: adding two sites to a service contract

Imagine your business maintains six council facilities. The client asks you to add two more sites from the following month.

For this fictional example, assume the additional locations fall outside the existing ordering provisions and require an agreed variation.

Your assessment identifies:

These figures are illustrative, not a pricing recommendation. The total assumes eight full months at the proposed fee.

The proposed fee is only part of the decision. The parties also need clarity on the start date, included services and performance requirements.

How should the variation move through approval?

Use statuses that show what has happened and what still needs a decision.

These are suggested workflow labels, not contractual rules. Adapt them to your agreement.

“Awaiting approval” should remain visible until the relevant requirements have been satisfied. A submitted proposal should not silently become an instruction to the delivery team.

What if the client says, “Start now—we'll sort out the paperwork later”?

Check the contract promptly and escalate the request to your contract owner.

Some agreements allow authorised directions or require work to proceed while valuation is resolved. Others use different approval processes. Neither automatically proceeding nor automatically refusing is a safe universal rule.

Establish:

• Who issued the instruction and what authority they have.
• Which contractual provision applies.
• Whether a notice or response deadline has been triggered.
• What records your team needs to preserve.
• How cost and timing impacts will be assessed.

Keep a contemporaneous record of the request, your response and any work undertaken.

Do not assume that an informal conversation has no legal effect. WA Government guidance warns that words or conduct can sometimes vary a contract, even where written-variation requirements exist. Obtain advice promptly where authority or entitlement is disputed. Source: Varying a Contract Guideline

Can you charge for extra work before a variation is signed?

There is no universal answer. Entitlement depends on the contract, the instruction, the circumstances and applicable law.

For day-to-day administration, keep proposed charges separate from approved billing instructions. Finance should be able to identify the contractual basis, authorisation and supporting evidence for an invoice.

A quotation, internal approval or submitted variation request does not, by itself, demonstrate that the buyer has agreed to pay.

If work has already started and the position is unclear, raise the issue promptly and preserve the relevant records.

What should you update after a variation is approved?

An approved variation needs to reach the people delivering and billing the work.

Check whether the change affects:

• Contract obligations and responsible owners.
• Milestones and recurring deadlines.
• Rosters, locations and subcontractor instructions.
• Reporting templates and performance measures.
• Purchase orders, billing schedules or invoice references.
• Contract value and forecast delivery costs.

Retain the earlier documents and a clear record of what changed. Make the current requirements easy to identify.

In the two-site example, approval is not the final operational step. The sites still need to appear in the roster, the reporting process and the billing instructions from the correct effective date.

For a practical register structure, see how to track contract obligations.

How Doreva Contracts helps manage variations

Doreva Contracts gives Australian government suppliers a shared place to manage contract documents, variations, approvals and obligations.

Use it to keep change requests and supporting records with the contract, track sign-off and retain a record of decisions.

For the additional-sites example, that helps your team follow the request through review and approval, then keep the resulting delivery responsibilities visible.

Your team remains responsible for confirming the buyer's authority, the agreed commercial terms and the contract's formal requirements. The shared record helps operations, finance and management work from the same information.

Start your 14-day Doreva Contracts trial and bring your active contracts, change records and upcoming obligations into one place.

Contract variation checklist: before you implement the change

Confirm that:

• You have checked whether the existing scope already covers the request.
• You understand the applicable variation or instruction process.
• You have assessed the effect on cost, timing and performance.
• Required notices and approvals have been addressed.
• The agreed change and effective date are recorded.
• Operations and finance have received the updated instructions.
• Someone owns the follow-through into delivery and billing.

The next time someone asks, “Can you just add this?”, your team should be able to explain what it involves, who needs to approve it and when it can take effect.