For many of our construction clients, construction change orders are one of two things. They are either a contractors worst nightmare or they are a contractors best friend.
Change orders are in the simplest of terms are – a change (or variation) of the plans and specifications of a construction project that change the scope of work, that are to be agreed upon by the parties involved, i.e., the client, contractor and architect. There may be more involved, depending on how large and sophisticated the project is. The change order can add or delete work, change the completion date of a project and can certainly change the pricing of the project. A change order can be minimal to the overall scope of the project, or a change order can be a significant change to the project, having touched all trades involved on the project.
Change orders are very common to all construction projects, residential, commercial, small and large projects. After the original is bid on, bids accepted, contact signed and project started, a client may change their mind on the original plans for the project and will suggest an alternate approach, which in turn create change orders.
Common causes for change order are: project’s work was initially incorrectly estimated; the project team discovered some obstacles or possible efficiencies that require them to deviate from the original scope; the client or project team are incapable or insufficient of completing the required tasks within the scheduled time frame; the budget, time and resources may have been impacted; additional features or options surfaced during the project; a contractor bid too low in order to secure the project and needs to increase the overall price of the project, which is a very exploitative practice.
For a contractor, change orders are a very necessary tool. However can be a nightmare when projects are plagued with change orders. Contractors retain our services to assist with capturing the most cost effective and efficient way of memorializing all the change orders, whether it’s in the field, job hut, truck or back at the office. Contractors have a very difficult time tracking and having change orders approved, when a developer or another construction trade is directing change orders in the field. If the change orders are approved, it can very likely be a huge if not catastrophic problem for the contractor. Change order, particularly disputed or not approved change order can cause project delays, which in turn can create expensive liquidated damage claims. With our assistance our clients maximize change orders and the change order process, which allows them to stay out of change order hell.
As for a contractors having change orders as their best friend, efficient, executed and proper change order, whether out in the field. job hut, truck or office, can allow the contractor to capture all the impacts of all change orders on a project.
Please call us to discuss how we can assist in making sure you aren’t getting into change order trouble. We assist in every aspect of the change order process and also offer brown bag lunches to speak with your PM’s, staff, etc., to explain the extreme importance of fully executed change orders and the change order process.