Construction industry is a major player in economy of any countries by generating employmentrnand wealth to the nations. However many projects in developing countries experiencedrnextremely low performance in terms of time cost. One of the contributing factors to this lowrnperformance among others is variation. This is because variation can affect project cost,rnschedules.rnWith this background, this study tries to identify whether variation exists or not, what causesrnthese variations, what is their consequences, which contracting party is the more responsible inrninitiating these variation and which is most affected as a consequences of these causes.rnBased on this a questionnaire which consists of 35 potential causes, 12 possible effects and otherrnquestions which enables to achieve the objectives of the research were developed. Accordinglyrnthe study concludes that variation as one major problem in Ethiopian Federal road constructionrnprojects. Right of way or accesses to site problems, change in defined scope, lack of properrnplanning, lack of proper evaluations of tender documents by contractors at tendering phase andrncontractorâ€™s financial problems were identified as major causes which results these variationsrnand client/employer were identified more responsible in initiating most of the variation issues.rnThe study also investigated; delay in project completion time, increase in project cost,rnsuspension or hold on works, decrease in productivity and dispute among parties as a majorrneffects and contractors as the most affected contracting party as a result of effects of variations