Change orders in construction are a common occurrence in the construction process.
Contractors will request change orders for any number of reasons. It could be a change in scope directed by you as the owner or it could be for overtime or weekend work not included in the original contract.
It could be for schedule delays outside their responsibility which extends the duration of the project or it could be a change order request for something that was inadvertently overlooked in discussing the original scope.
Tips to Minimize Change Orders in Construction
Many opportunities for a contractor to request a change to their contract can be minimized by ensuring the performance tips below are addressed in your original contract language negotiation and award. Knowing these few tips before you hire a contractor may save you a request for change or changes down the road.
When a trade gets behind in his work, it not only impacts the schedule but it also impacts all the trades that follow his work.
If the trades that follow are then required to accelerate their work to maintain your schedule, they can incur overtime costs that they will seek to recover through a change order for a cause not of their making.
Contractors or trades who fall behind in their scope (and not due to you as the owner or to project impacts outside their control) should have the understanding upfront that they will be required to take necessary action to meet and maintain your job progress, without additional compensation.
Any costs associated with accelerating work, if required to meet schedule, then becomes an issue handled between the contractor and his trades.
MATERIAL DELIVERY COMMITMENTS
Change orders in construction often occur when the contractor fails to timely secure orders for materials. The contractor, as a best practice, needs to timely secure delivery commitments, place orders for materials, equipment and services required in connection with the Work.
Too often contractors will wait to order materials until just before the time they are due for scheduled installation. Many times they will find out that particular item is no longer in stock or unavailable, resulting in a potential schedule impact.
This happens frequently when a contractor does not have the storage capacity for items ordered early and does not want to pay for storage.
There are also many instances where a specified product or material becomes discontinued and that can be a schedule impact if a new alternate product needs to be selected and approved.
Selecting a new product and/or taking a late delivery impacts the schedule, the overall work flow and can result in change order requests.
Discuss with the contractor, in advance, any items on your project which he may see as a potential delay so alternatives can be discussed or approved substitutions selected.
DRAWING DIMENSIONS vs FIELD DIMENSIONS
Change orders in construction generally occur when dimensions provided on the contract drawings have not been verified on the project site where the work is to be performed.
Drawing dimensions rarely correlate to actual field conditions which is why measurements should always be field-verified.
The contractor and his trades need to be responsible for taking necessary field measurements before fabricating materials to ensure the work will fit and function properly with other work.
It is not uncommon to have actual field dimensions off by not only inches but feet which can impact the integration of any work that follows. Improper measurements or failure to field measure can result in potentially costly rework and schedule impacts — not to mention change orders.
Avoid change orders for this condition by making it their responsibility to field measure in your contract language.
NO SUBSTITUTIONS ALLOWED
If your contract drawings call for specified product, model, color, serial number, manufacturer, or series, then the contractor is contractually obligated to install that product as specified. He is also responsible for the installation, performance and warranty of that specified product.
This invalidates any warranty you’re entitled to because the original product listed in the contract documents was never installed. This does happen and more than you can imagine. A contractor will use a similar looking or performing item he either has in stock or gets through a favored supplier and an owner may be unaware until there’s an issue with what was installed.
Ensure your contractor understands up front and in your contract language that substitutions are not allowed unless authorized in writing by you.
If substitutions are authorized by you as the owner, then make sure the contract language is amended to reflect that substitution.
STICK TO THE CONTRACTED SCOPE – FIELD MODS ARE EXPENSIVE
Change orders in construction field modifications happen frequently. People are very visual and things often look a lot different in real life than they do on paper.
If you have an opportunity to visually see a physical finish, material, style, color, model or texture of what you hope to have installed; and do it during your design phase, you will save yourself a stack of change orders.
Remember that something as simple as changing a paint color after the walls have already been painted, will impact any trades following that work or adjoining to that work…many of them will want to be compensated for any rework.
You can imagine what would happen if you decided you didn’t like the tile, carpet, location of a wall outlet or air conditioning diffuser.
You’re certainly entitled to get what you want, however, you get more bang for your buck when you can handle this with your contractor up front and before the work starts.
Not all change orders in construction can be avoided but taking a few extra steps in negotiating your original contract agreement will certainly go a long way in helping you maintain your budget and minimize requests for change.
Filed under: Contracts