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Change orders are something contractors deal with every day. Change orders lead to increased costs, time, and labor and can be a huge cause for arguments between a contractor and client. The best way to manage a change order is to be prepared. Talk with your customer beforehand about how you’re going to handle a change order, prepare them for the changes that can occur so you’re both on the same page when the project begins. Some of the biggest causes for change orders are:
- Wrong specifications in the original contract
If the original drawings had the wrong details, this could cause serious defects in the plan. Make sure to include accurate drawings in your plans and get it approved by your customer as well as making sure you approve of the design details. Not only can the specifications in the design drawing be incorrect, but if you do not plan for the correct project environment, you could order wrong equipment and bring the wrong labor.
- Delivery delays
Delivery delays are inevitable at some point. If your equipment or supplies do not arrive on time, you can’t begin work on your project. Not only are you behind schedule but now you’ve paid for extra labor to show up when they can’t start yet. There is no way to prevent delivery delays, but it is always good to be prepared for them. Track your delivery in every way possible, that way if there is going to be a delay, you might know beforehand so you can make changes to your labor schedule.
- Unforeseen conditions
One of the most common unforeseen conditions that require a change order is soil conditions. You can do soil studies to try and prepare for your job, but once you arrive, it could still be completely different than what you planned for.
- Incorrect budgets or schedules
Creating a schedule is one of the largest planning steps when preparing for a project. Some projects may be harder to plan for, so when you get halfway done with the project and realize you’re going to be working 2 weeks longer than expected what do you do? This is when you have to put in a change order. It’s not always easy to plan a schedule so when going into a project, be prepared or plan for the project to change schedule.
- Design changes
A design change can come from any party in the contract and can be necessary or not necessary. Sometimes, as a contractor, you may see something that you’ve seen before that may not work as well and you could suggest something to your customer that would work better. Other times, you may start a project that is still in the on-going design process and your customer may change something in the design. This can lead to multiple change orders in one project.
The moral of the story is: change orders will happen! The best way to handle them is to prepare yourself so when something does happen, you have a plan in place to calmly resolve the issue. As you tackle more change orders, you will find a process that works best for your company, making change orders easier to navigate. Change orders can be a pain, but there is no reason to not be prepared.
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