A Guide to Construction Change Orders Part 2
Our Brandon construction attorneys understand that even the most well-planned projects don’t always go as planned. This is especially true for change orders. A change order is simply a contractor’s right to more time to complete a project or more compensation for the work performed outside of the original project scope.
Due to the rapid pace that many projects move, there is potential for various elements that may require change; sometimes multiple changes are needed for a particular element. This change order guide will help you get started on the road to managing change orders more effectively. This second part concludes our two-part series, visit Part 1 for the beginning of the article.
Avoiding change orders is all about being proactive. The best way to deal with them and reduce their likelihood, is before you begin the project. Before starting work, change orders should be priced. It’s important to review project plans and identify and submit issues along with the extra costs to the owner. Another proactive activity would be to select subcontractors early and ensure they understand the scope of the entire project and what their responsibilities are. Once work begins, costs and changes need to be tracked meticulously.
Best Practices for Managing Change Orders
Change order management will require a team effort. Understanding the scope of work is key. Making sure that everyone agrees to all changes is a must. This will require implementing an approval process. Finally, putting everything into writing is critical. A Brandon construction lawyer is a great resource for ensuring legal agreements are sound. Practicing good change order management reduces the probability of disputes. As experienced Brandon construction attorneys, we thoroughly understand change orders and have represented many construction professionals in disputes due to change order triggered delays, verbal change orders, and starting work without the approvals.
When implementing best practices, especially in the area of sound accounting policies, you are more likely to collect on the changes orders. The following steps must be taken to do so:
- Understand your contract and plans
- Establish a change order file
- Price out change orders
With effective change order execution, financial statements will be accurate and reliable and will lead to contractors receiving appropriate compensation.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.