Construction Management: A Beginner’s Guide to Change Order Management

Something the construction management is not very glad to see, but it happens. Often. Before everything, there is a construction contract signed by both parties. This is a legal form that contains all the details. Cost, performance and schedule of all work that will be performed. It’s a way for minimising the risk of miscommunication for both the contractor and the owner. Yes, but what it ensures? A good construction contract always ensures that there won’t be room for confusion regarding:

• What will be built and how it’s going to be built;
• The cost of the project;
• Deadline (how long the building of the project will take);
• The quality of the work that will be performed and all the needed materials;
• Terms of payment and host of terms and conditions;

With this being said, even the perfectly planned project see the unexpected. There isn’t anyone who can predict what’s the future for these projects. Delays, unexpected interruptions, necessary changes to the scope, owner’s needs and desires for a change, increased costs etc. It’s time for changing the first agreed terms and conditions. A written change order does this.

Here are some key points you need to pay attention to when executing this change order:

• Make sure you are familiar thoroughly with the scope of work for every single contract. You wouldn’t want to let the contractor perform any work that will definitely change some criteria written above until the Change Order is approved.
• Require from the Contractor to write the change requests. Avoid verbal change orders because they can easily get disputed later on. Carefully review everything requested in the Change Order. Revise and discuss these new requests with your project team until they are acceptable for both parties.
• Make a special note about the duration of the construction project. Many change orders trigger a delay that often is not considered at the time of changes. This will definitely create misunderstandings later. Insist that the Change Order clarifies the delay.
• When you receive the invoice, confirm that the Change Order has not been previously billed and everything is correct.
• If you represent the owner, establish clear and articulated parametric regarding your authority. This way, you will have a clear image of what’s in your range, when you can bring decisions on your own and when you need to seek special approval of the owner.

How do you manage changes? To help you with changes and beyond, here’s an article to guide on what to do when the scope of a project changes. You might want to read the interview with Carlo Jansen on how good contract management is the key to a great project. For overall productivity in the construction site, a downloadable ebook is offered for free.