What Are Common Reasons for a Construction Change Order?
The common reasons for construction change orders can all be traced back to the decisions made during the construction planning phase. Decisions around the design, drawings, materials, timeline, budget, human resources, environmental assessments, and the ability to realistically assess how long the project will take – are all common reasons for a construction change order.
Change orders are not unique to construction projects. In fact, according to the Independent Project Analysis Group, on average 35% of all construction projects will experience at least one change order.
The impacts of change orders touch everyone: the contractors, stakeholders, tradespeople, tax payers, and the community members relying on the new school, hospital, transit, housing development, shopping mall, etc.
Any level of change order, however minor does impact the stability, budget, schedule, and overall feasibility of the project.
The trickle-down effects of for example, moving a wall in a school means that the entire design must be changed, new materials are required, staffing contracts must be extended, new money must be found, and ultimately the school opening is delayed – displacing students, teachers, and other school staff.
And this is why we want you to understand the facts around change orders. The more you understand about how they happen; you can be better prepared to put in place the construction processes and procedures that limit the chances of change orders in your construction project.
Remember, ultimately public perception of your construction project comes down to your ability to successfully complete your project on-time and on-budget – this means you need to limit risk.
Every single change order adds risk to your construction project. Contact us to learn how the PCS team can work with and for you to limit risk and improve your cost certainty.
What is a Construction Change Order?
A change order is work that is added to or deleted from the original scope of work of a contract, which alters the original contract amount and/or completion date. A change order may force a new project to handle significant changes to the current project. (Design Buildings Wiki)
A lot of the news headlines around construction projects swirls around cost overruns. The only way to stem the flow of cost overruns that are damaging the reputation of the construction industry and erasing public confidence in construction projects is to go to the source of the cost overruns.
And this is why we care about change orders. Every single change order adds up.
How Change Orders Happen
Change orders happen when key steps in the pre-construction phase are rushed or missed.
For example, in a rush to secure government funding the architect’s drawings may not be fully reviewed or all stakeholders are not consulted on what they need and expect from the construction project.
Common causes for construction change orders happen when the following keys to a successful construction project are missed:
A construction cost estimate is used to determine the time, resources, and money required to successfully complete a construction project on-schedule and on-budget.
It’s during the construction cost estimate phase that questions or problems with the design, resources, scheduling, or funding can be identified and solved before the project begins. Doing so, mitigates the possibilities for change orders that can interrupt the construction project.
So often construction projects are slowed and burdened by change orders due to unexpected obstacles. These can be obstacles such as unexpected underground utilities, environment conditions that impact the materials used, archeological discoveries, or lack of experienced construction personnel.
It’s important that you take advantage of an independent review of the feasibility of your construction project. This ensures that problems and obstacles with the design, permits, planning, research, and scope are prevented.
Lack of skills and experience
It’s vitally important that everyone involved in your construction project has adequate experience and skills. This means that the project managers know and understand how to plan, schedule, and budget your project. Your contractors must have real tangible experience in the type of project you’re planning. The employees doing the actual work have the qualifications and certification needed to meet regulatory and standards requirements.
When there are deficiencies in knowledge and skills, this ultimately ends up causing delays, introducing error, and adding cost to the project – these all result in change orders.
The more time taken reviewing designs, drawings, and material and resource availability the easier it is to prevent design changes.
There are two general categories of design changes:
- The project owner changes their mind, requests new features, or options.
- Changes that are required to successfully complete the project – changes that could have been prevented with a thorough independent review of the project before construction began.
Connected to these four core common causes for change orders are the underlying problems of inaccurate bids and flaws in scheduling and planning. When the bid is incorrect or the schedule is overly ambitious, change orders may be triggered to force changes that hopefully can get the project back on-schedule and on-budget.
However, it must be noted that every change order request should be considered an interruption to the construction project. In some cases, all work must be halted until the change order is reviewed and approved.
How To Prevent Change Orders
The best way to prevent change orders is to take advantage of the oversight and analysis that comes with an independent review of your construction project.
When you work with a company like PCS to provide accountability of construction cost through all phases of your construction project, you can be confident that your project is getting the attention it needs and deserves.
Trust the PCS team to apply our industry experience and proven methods to help you avoid problem bids, stay on budget, limit costly overruns, and gain more value for your construction dollar. Contact us to learn more about how we work for you to make sure that change orders, cost overruns, delays, and construction headaches are not part of your construction project.