Change orders are inevitable, that’s why contractors should have a construction change order process to streamline the process. While contracts might specify certain items or requirements, the forms, paperwork, and storage should stay the same for most contractors. These tips will help contractors master their construction change order process.
What is a Change Order?
A change order is a document that records a potential amendment, or an amendment, to the original contract. It is an order that changes the contract. Simple enough, right? Change orders are used when additional services and costs are added to a project. However, change orders in construction can get a little tricky. Many companies don’t have a set process for change orders, so sometimes they forget to bill for the extra parts and labor. Sometimes companies forget to complete the requested work altogether, or the client disputes charges. These are all reasons why a construction change order process is necessary for any company.
The Anatomy of a Change Order
In order to create a construction change order process, it’s important to know what should be included in a change order. Every change order should include a revised scope of work. This could be more or less work, depending on the changes. Usually, the revised scope of work is a customer asking for an already agreed upon addition. Once that is covered, there needs to be the overall cost of the new work. All relevant modifications to the original contract should be included in the change order. This would include the new schedule, that way everyone is informed of how long the addition will take. Finally, the contractor and the client should sign off on the change order, ensuring that all parties agree to the change order.
Mastering the Construction Change Order Process
Since change orders are such an important part of a project, project managers must have a process for creating, editing, and organizing them. Some contracts have a process laid out in case there is a necessary change order, which is why it’s important to read the full contract before proceeding. Regardless, these tips will help you master the construction change order process.
Reread Your Contract, Review All Plans
Rereading the contract is one of the easiest ways to master the construction change order process. Many contracts do have a process in place for how a change order should be handled. The contract can specify who the change order should go to, or a timeframe that they must be submitted by. Other times they specify documentation needed for submitting a change order. Part of mastering the construction change order process is making this the first step in your process.
Along with rereading the contract, review all plans. If your change order is because of ambiguity, errors, or omissions in the scope or plans it needs to be addressed. It’s easier for the project manager to send out a revision of the documents before there are more issues than it is for them to keep having to delay due to errors. While plans should be reviewed and questions asked before the project starts, life can get in the way, or someone might guess at the answer. Being certain in the documents is an important step to mastering the construction change order process.
Respond in a Timely Fashion
Change orders should be submitted in a timely fashion. If the owner requests a change or the contractor, they should submit a change order as soon as possible. This allows everyone on the project to respond and adjust their schedules as needed. A change order can throw the project schedule off, or require a specialty part, everyone involved needs to know about it. But it goes both ways. Once a change order is submitted, all parties need to review and respond in a timely fashion.
Communication is key to ensuring that all parties are in the know. The contractor or owner must carefully define the scope of the new work, and ensure that it’s easily understood. They also must communicate the new needs from the change order to other contractors. While they might not be directly involved in the change order, a change order can impact the schedule. Sitting down with the agents for all involved to discuss how changes in scope will directly or indirectly impact their work. It also is a good chance to determine whether a change order is even really needed because someone might have a solution.
One of the easiest ways to master the construction change order process is to switch from paper logs and email to a project management solution that understands change orders. Project management software can hold change order templates to make generating one easier. It can also help users keep track of change order statuses that way they don’t start on an unapproved change order, or forget to send it back. Mastering the construction change order process is easier than ever with all of the available technology.