Construction Project Delays and Change Orders Are Inevitable. Here’s How to Prepare.

Construction project delays and scope changes are a fact of life in construction. Most construction projects (and their contracts) will see significant modifications before the project gets finished.

This happens at all levels of the sector. Even the most expensive, most carefully planned megaprojects ($1 billion and up) see their project scopes stretch. McKinsey researchers Sriram Changali, Azam Mohammad and Mark van Nieuwland wrote in 2015 that 98 percent of such projects “suffer cost overruns of more than 30 percent.”

It’s unlikely that figure has changed drastically since. The factors that drive construction project changes — scope changes from the owner, bad weather, crews getting overbooked, material availability issues — are eternal.

That means any construction project should be designed to accommodate changes and delays.

Below are three tips for doing just that.

Foster a Culture of Documenting Everything

A change or a delay isn’t what derails a project. It’s the team’s preparation for and response to those changes that cause problems.

Let’s start with preparation. The No. 1 rule in business is to get everything in writing. The same goes for construction projects:

• If a GC needs to change the sequence for how work is going to get done, you need to document that.
• If materials appear flawed or not up to standard in some way, you need to get photos of them.
• If someone parks their van in the path of your team’s machinery, and it takes 20 minutes to find the driver and have them move, get photos and record the time lost.

In the event of a work delay, then your team will have all of the evidence necessary — photos, dailies, emails and texts to the GC — to establish who’s liable for productivity loss. And if a situation escalates to the point that you need to file a construction delay claim, we have a template letter you can use.

In the event of a request to change the construction project’s scope, having strong project documentation prepares everyone to assess the impact of a change. That starts with having a clear contract. A change order can then be filed to amend that original construction contract. That document will define:

• The revised scope of work.
• The price of that new work. (Remember, always be candid and upfront about the fact that you will be charging for additional work.)
• Relevant modifications to the original contract, including updates to the delivery schedule.
• Signatures of the parties involved.

Again, documenting everything benefits your company if a dispute arises with the GC or the owner. By having all of the construction project documents in one place and all project changes clearly documented, you protect your company from time spent on rework, free work or unproductive tasks.

Have Tools and Processes to Help You Assess Scope Changes

Having documents in one place and project changes clearly documented means having the technology to handle that capability.

With construction project teams needing to coordinate over distances in real time, it doesn’t make sense to use paper logs and email to manage documents, as Craig Tappel of HUB International writes.

“Today’s systems offer templates for change orders and capabilities to track their approvals, making the process less cumbersome and more efficient than paper logs and email.

“Upping your game for change order procedures doesn’t mean disputes won’t happen. However, when the facts are well-documented and the process done right, your business and each project will be better protected, risk will be mitigated and you will have fewer surety and professional liability issues as well.”

But having these tools is helpful only when your team has a process in place for managing delays and changes. That process should include the following:

• A way to assess how critical a delay is. Some delays will be obviously critical, others less obviously so. “It’s possible for seemingly small issues to snowball, as a delay in one area of the project can affect several others,” the team at The Builders Association writes. “Whether the initial cause of the delay was excusable or not, a reliable general contractor should be swift and decisive in formulating solutions, so as not to allow the problem to get out of hand.
• A way to calculate the price of a change order. James M. Bolin, retired senior executive consultant at Long International, writes that most construction companies will opt for a unit price cost calculation, a fixed lump sum, or an estimate based on time and materials involved. Job costing tools can help you with these calculations.
• A way to assess how changes impact project timelines. Construction project management software is helpful here. It allows the project manager and any other stakeholders to access necessary project documentation quickly, see all construction project data and make informed decisions from there.

Make It Easier for All Stakeholders to Collaborate on a Solution

Disputes over delays and change orders can escalate and further stretch timelines and budgets. Resolving issues as quickly as possible and agreeing on a solution will help all parties manage their costs.

Transparent, open communication is the key to finding resolution. Make sure everyone involved understands why there’s been a delay or change request, how it impacts the construction project, and what steps people need to take from there.

This is where it pays to have a single source of truth that everyone can work from, Ben Sparhawk at STEVENS Engineers & Constructors, Inc. says. “Working on multiple systems and tools hinders your project’s development and opens the door to several misunderstandings,” Sparhawk writes.

“Each stakeholder can end up having their own version of the truth, making it hard to keep track of almost anything. … This is why a central data repository is a must-have.”

Stakeholders can include project managers, other trade contractors, suppliers, government officials and parties with a financial stake in the construction project. To get such a disparate group of people on the same page, it’s useful to be the party with that central data repository. You can then share data and documents with other relevant parties as needed.

Finding the Right Software for Your Business

The three tips above highlight a number of tools: change order management software, job costing software, document management software.

Vetting such tools can seem intimidating. Our experience is that trade contractors build much stronger change management processes when they focus on software that:

• Is easy for everyone to learn and use.
• Integrates with the other tools they have.
• Is designed for mobile use, not just laptops or desktop computers.

We built eSUB Cloud to be that tool. Our software gives project managers the tools they need to estimate work and timelines. It gives back office staff an easy way to collect, store and share construction project documents. It gives field teams an easy way to collect site data and send reports back to the office.

To learn more, schedule a demo today.

Images used under license from Shutterstock.com.