Newbuilding Variation Orders

A shipyard’s variation proposal can look inexpensive because it prices the replacement equipment but leaves out drawing revisions, cancellation charges or testing. Another proposal can cost more yet fit the existing programme. Compare the complete change against the signed specification before deciding which offer meets the buyer’s requirement.

This guide concerns a specific change during an existing newbuilding project. Our newbuilding buyer’s guide covers the wider ordering process. Here, the useful output is a comparison showing what changes, the net adjustment, the affected programme and the evidence required to accept the result.

1. Fix the baseline and identify why the change is proposed

Record the contract, specification paragraph, maker’s list and relevant drawing revisions that currently define the work. Identify later amendments already agreed. Then describe the requested difference in measurable functional terms, with a change number, revision, requester and decision date. A marked-up drawing without an agreed reference can conceal which equipment or work is already included.

Distinguish a buyer-requested enhancement from a builder’s substitution, a response to a new rule, or work needed to meet the existing obligation. Do not assume that every drawing comment is a chargeable addition. Ask the project and legal teams to establish which contractual procedure applies before comparing the commercial offers.

A publicly available Namport tender reproducing NEWBUILDCON provisions separates buyer changes, builder substitutions and rule changes. Its change procedure addresses written requests, consequences and responses, including a dispute route. This is one project document; use the executed contract to determine authority, notice requirements and whether work proceeds during disagreement. Neither a site-team email nor this comparison method establishes those rights.

2. Compare technical interfaces and acceptance evidence

Give each proposed solution the same functional requirement. Ask the designer and equipment supplier to identify affected interfaces, documents and tests, including items described as unchanged. DNV’s newbuilding project-support description connects functional requirements with drawings and specifications; a cheaper component is not a complete comparison if its integration is unpriced.

For an electrical indication change, relevant questions could include signal availability, panel compatibility, power supply, cable routing and alarm descriptions. Have the responsible specialists determine the actual scope. Obtain their confirmation of any assumption that existing equipment can be retained; do not treat an available terminal or catalogue feature as proof of compatibility.

List the revised drawing numbers, supplier documents, inspection or test procedures and final records. Identify who reviews each item and who must attend testing. DNV’s plan-approval service describes drawing assessment as part of newbuilding classification. Ask class and the relevant statutory authority or recognised organisation which submissions the particular change requires. Technical approval and the buyer’s contractual acceptance must each be addressed.

3. Worked comparison: remote indication for two service pumps

Fictional example: the baseline includes two service pumps with local starter packages. The buyer now requests remote running and trip indications at a monitoring panel, with local operation retained. Pump duty and the pumps themselves remain unchanged. Option A adapts the original starters; Option B replaces the starter packages with an alternative arrangement offering the required interfaces.

Assume for comparison that the designer and suppliers have confirmed both solutions can meet the same requirement, subject to the recorded review and test scope. This is an invented purchasing exercise, not an electrical design or a statement about a particular product. Retaining the original scope without alteration remains a decision option, but does not meet the added indication requirement.

All figures below are invented cost units (CU), with no currency conversion or relationship to market prices. Positive values are additions; negative values are assumed agreed credits for omitted baseline items. Original contract costs remaining unchanged are excluded.

Option B’s equipment addition is higher, but its assumed credit and lower engineering and installation costs make its net addition two CU lower. In a real comparison, reconcile credit items with cancellation charges so the same deduction or cost is not counted twice. Check quantities, currency, taxes, transport, attendance, quotation validity and exclusions. A proposed credit requires confirmation under the actual agreement.

4. Compare incremental delay against the existing programme

Equipment lead time is not automatically an extension of the vessel’s delivery date. Compare each revised sequence with the relevant baseline milestone and then with the integrated construction programme.

For this example only, Day 0 is the release of a complete change package for review. All durations are invented working days on one common calendar, with no overlap between the stages listed. The existing electrical-readiness gate is Day 36.

Option A fits four days before the existing gate; Option B misses it by three. The cheaper option therefore has a schedule consequence in this model. Whether that affects whole-vessel delivery depends on the actual downstream dependencies, available float, resources and agreed mitigation. It does not establish an automatic three-day contractual extension or entitlement to delay costs.

Request dated supplier commitments and a marked-up programme, with assumptions about review responses, access and test attendance. Distinguish a confirmed booking from a requested slot. Price any mitigation separately and revise the programme if it changes the sequence.

5. Record the decision and what will demonstrate completion

Compare technical compliance, net adjustment and schedule exposure together. The example has no universal winner: choosing B saves two CU, while A preserves the assumed gate. The buyer needs the actual value of the timing difference and confirmation that both solutions meet the requirement.

Ask the authorised teams to record the selected scope, additions and credits, applicable commercial terms, affected dates, retained or amended performance obligations, drawing references and acceptance evidence. For this example, that evidence would address the agreed running and trip indications, correct identification at the panel and retention of local operation, using a procedure established by the responsible specialists. Carry unresolved findings into a dated close-out record.

A comparison table supports a decision; it does not amend the contract. Use the project’s notice and authorisation procedure, keep superseded offers identifiable and confirm which revision governs procurement and installation.

Share the baseline specification, change request and competing proposals with Golden Shipyard’s sale and purchase team. We can coordinate the commercial comparison and outstanding questions with the yard and relevant advisers. For a wider vessel search, browse vessels for sale.