How to Reduce Change Orders in Construction, Part 1
In the construction industry, few phrases evoke an overwhelming sense of dread like the term “change order.” No one wants to deviate from a plan and progress. If you were to ask a group of owners, contractors, and subcontractors how they felt about change orders, it’s likely that the sentiment will be universally negative. Yet, change orders are a seemingly ubiquitous part of construction projects. Unfortunately, so is the financial impact. Recent studies have indicated that change orders account for nearly a third of all project costs.
Change orders are so common in construction, yet so potentially damaging that they have to be preemptively addressed. The Fort Lauderdale construction lawyers at Trent Cotney P.A. have seen numerous construction projects over the years and understand what separates projects that run smoothly from those mired in change orders. In this two-part series, we present best practices that can minimize the likelihood that change orders will be placed.
Define a Clear Scope of Work
One of the best ways to minimize change orders is to be as clear as possible about what work is being done during the project and who’s doing it. Every aspect of project work should be covered for both contractors and subcontractors. It should also be clear who are the points of contact from an owner and contractor standpoint should issues arise.
Put a Change Management Process in Place
The reality is that change orders are likely to happen on your project. However, if you put a process for dealing with change orders in place, the impact can be greatly minimized. Your process should have the steps that a change order request must go through as well as a clearly defined hierarchy for decision making. The financial impact of a change order should be addressed. The information that needs to be included in a change order should be addressed as well. Change orders should include contracts, daily reports, revision plans, and photos, among other items.
Foster Collaboration Among All Parties
It may seem simple, but one of the most effective ways to minimize change orders is to make sure that all parties are in continuous communications. Frequent meetings are one of the best ways to accomplish this. Issues can be addressed on a weekly basis and handled before they turn into delays. Perhaps even more effective is project management software that allows for the digital sharing of reports, photos, and data among stakeholders.
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.