In part one of this two-part series, the Jacksonville construction lawyers at Cotney Construction Law discussed two common types of construction cost overruns: inaccurate project estimates and design errors. Now, we will discuss three other types of construction cost overruns, including:
- Change orders
- Administration errors
- Poor project site management
Cost overruns can quickly derail a project if you fail to take proactive measures to prevent them. As we’ve stated previously, cost overruns commonly lead to disputes with owners. Fortunately, our Jacksonville construction lawyers are well-versed in handling construction-related disputes and can provide contractors with an array of services to help diminish the blowback from such disputes.
3. Unexpected Change Orders
While change orders are never really expected since they inherently go against the established design plan, it’s important to have a plan in place in the event that a change order is required to wrap up construction to the owner’s satisfaction. Both the owner and contractor can issue a change order if something about the design presents a problem during the construction process. Generally, new specs or proposed fixes will be considered to address the issue. Oftentimes, the costs associated with these additions can contribute to a cost overrun, but if you plan in advance and recognize areas of potential concern early, you can mitigate the effect a change order has on your project. One way to do this is to implement change order provisions into your contract with the help of our Jacksonville construction attorneys.
4. Administration Errors
Even when a project is moving ahead without any disruptions, if your project administrators are unable to mirror this success behind the scenes, you may find that your project is experiencing cost overruns. Small administrative errors can have significant consequences on any and every part of a project. It’s vital that everyone remain on the same page from the time you break ground to the time you complete the project. Try to segment these workers so that they can focus on specific aspects of a project. Hiring too many or too few administrators can complicate matters, so you’ll have to figure out how to find the perfect balance. One way to boost the efficacy of your current staff is to give them access to project management software that allows them to keep a close eye on the project.
5. Poor Project Site Management
Maintaining control of your project site can be a significant challenge with the sheer number of workers inhabiting it at any given time. Differing viewpoints, varying skill levels, and unexpected accidents can cause even the most tightly planned project to crumble, leading to cost overruns. This is especially true for workplace injuries, which are often viewed as avoidable and can create the perception that are unequipped to handle your duties. When an owner perceives that you have little control of your team, it can cause trust issues that threaten your professional relationship.
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.