What is a Construction Change Order?

A construction change order is a change in the scope of the original work agreed upon by the construction team and stakeholders. Construction change orders can range in severity and overall implications. In some cases, a change order can force a complete work stoppage while designers, architects, and construction experts determine how to manage a stakeholder request. In other instances, a construction contractor may discover a flaw in design or an issue with building materials that forces a change to the design or schedule. Every change order has ramifications, impacting everyone involved with the project including investors, stakeholders, tax payers, contractors, construction employees, designers, and architects. Think of a change order as a slow-down or interruption in the agreed upon schedule and plan. Any interruption has trickle-down effects, with work stoppages, potential loss of employees, weather implications, delays in opening, and the subsequent payments that must be made regardless of the progress of the construction project. And yes, there is a link between change orders and construction cost overruns. It is very challenging to manage change order requests and interruptions without experiencing some kind of impact to the budget. Think of how much it costs to update a design, order new materials, extend contracts, or to delay the opening of a new business. Every change order adds to the complexity and costs of your construction project. At PCS, we want you to have a team behind you who is committed to seeing your project completed on-time and on-budget. Why Do Change Orders Happen? Change orders happen when key steps in the project estimating, design, evaluation, assessment, and planning stages are overlooked or rushed. Often stakeholders are competing to secure government or grant funding, inadvertently resulting experienced construction personnel to cut corners or to rush the decision-making process. It’s important to understand that change orders are not unique. In fact, according to the Independent Project Analysis Group, on average 35% of all construction projects will experience at least one change order. This highlights why it’s so critical for everyone associated with your construction project to understand why change orders happen and what can be done to prevent change orders. How to Prevent Construction Change Orders To prevent construction change orders, make sure the following are part of your construction project:

• Cost estimating A Basis of Estimate (BOE) is a required component of the construction cost estimate. A BOE is used to define the time, resources, and money required to successfully complete a construction project on-schedule and on-budget. During the construction cost estimating and BOE phase that questions or problems with the design, resources, scheduling, or funding can be identified and mitigated before the project begins. Often, during this process, improvements can be made to the construction project – making it more cost-effective and manageable.

• Feasibility assessments A feasibility assessment is an important tool in the early planning phase of the construction project. The feasibility assessment allows the stakeholders, designers, architects, and engineers to clearly understand if the project is viable. Essentially, a feasibility assessment helps stakeholders and others to establish a business case for the project and the possibility of its success. An independent review of the feasibility of your construction project identifies obstacles with design, permits, planning, research, and scope before they interrupt the construction phase.

• Experienced personnel Everyone involved in your construction project must have the requisite construction skills and experience. 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. Any lapse in experience will result in construction errors and problems – forcing construction change orders, cost overruns, and schedule delays.

• Design review Do not rush the design review process. Do a thorough review of the design, drawings, engineering plans, available resources, and materials. Typically, design changes force construction change orders – underscoring why it’s important you have an independent review of the proposed design and construction plan. An independent design review can mitigate the primary 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.

• Accurate scheduling and reviewDuring the development of the construction schedule and plan, obstacles that can lead to a construction change order can be identified. Take the time to thoroughly plan the construction project. This includes meeting with each team involved in the project to determine what issues could result in slow-downs, change orders, and delays. This information should be used to further refine the construction design and be used to guide the construction schedule.

Remember, there is no such thing as a small construction change order. Every change, regardless of its scope will force delays, cost overruns, and schedule slippage. The more work that is done before the digging starts – the easier it is to identify obstacles and other issues that could lead to problems. Make sure everyone has the chance to speak up and voice their thoughts on the construction project. You don’t want to learn four weeks into the construction that the design of the new school has overlooked the proximity of the school playground to the street or that the new hospital’s emergency room is too far away from the patient registration and assessment area. Taking Advantage of Independent Review Change orders do not need to be part of your construction project. When you work with an independent team tasked with providing construction project oversight and analysis – you can prevent the errors and omissions that lead to change orders. When you work with a company like PCS, you can be confident that your project is getting a thorough review and analysis before, during, and after project completion. Trust the PCS team to apply our industry experience and proven methods to ensure that the critical steps in construction planning and management are not rushed or skipped. Contact us to learn how PCS makes sure that change orders and cost overruns are not part of your construction project.