CBHerman - Think Outside the Box: Newsletter September 14, 2023

​CBHerman - Think Outside the Box: The Dos and Don'ts of Construction Project Change Orders – September 14, 2023

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The Dos and Don'ts of Construction Project Change Orders

As a Construction Project Manager/Leader based in Houston, TX, you know that change is a constant in the construction industry. Change orders are a crucial aspect of project management, allowing for necessary adjustments as a project progresses. However, managing change orders effectively can be a challenging task. In this blog post, we'll explore the dos and don'ts of construction project change orders to help you navigate this critical aspect of your role.
 
The Dos

• Document Everything
  • One of the first and most crucial steps in managing change orders is thorough documentation. Ensure that all changes are recorded, including the reasons for the change, cost implications, and any revised timelines. This documentation will be essential in avoiding disputes and providing a clear history of the project's changes.
• Communicate Effectively
  • Effective communication is the cornerstone of successful change order management. Keep all stakeholders informed, from the project owner to subcontractors and team members. Regular meetings and updates will help ensure that everyone is on the same page and can contribute to smoother transitions when changes occur.
• Evaluate Impacts
  • Before proceeding with a change order, it's crucial to assess its potential impacts on the project. Consider factors like cost, schedule, quality, and safety. Evaluating these aspects will help you make informed decisions and prioritize changes based on their overall impact on the project's success.
• Negotiate Fairly
  • When negotiating change orders, strive for fairness and transparency. Ensure that all parties involved understand the changes' financial implications and agree to the terms. Fair negotiations can lead to better working relationships and fewer disputes down the road.
• Update the Project Plan
  • As changes are approved, update the project plan accordingly. This includes revising schedules, budgets, and any other relevant documentation. Keeping the project plan current will help everyone involved stay informed and aligned with the project's new direction.

 
The Don'ts

• Don't Delay Documentation
  • Procrastination in documenting change orders can lead to confusion and disputes later on. Always prioritize documenting changes promptly, even if they seem minor at the time. This practice will help maintain order and clarity throughout the project.
• Don't Assume Agreement
  • Never assume that a verbal agreement or a handshake is enough to proceed with a change order. Formalize changes with written agreements that detail the scope, cost, and timeline adjustments. This will protect all parties and minimize misunderstandings.
• Don't Ignore Cost Control
  • While accommodating change is essential, it's equally important to maintain control over project costs. Avoid unnecessary changes that can significantly impact the project's budget. Carefully assess the cost implications of each change and prioritize accordingly.
• Don't Neglect Legal Considerations
  • In some cases, changes may have legal implications, such as contracts, permits, or regulations. Don't overlook these aspects. Consult with legal professionals if needed to ensure that all changes comply with the law and contractual agreements.
• Don't Forget the Big Picture
  • Lastly, always keep the project's overall goals and objectives in mind. While change orders are necessary, they should align with the project's mission and contribute to its success. Avoid changes that could deviate from the project's primary purpose.

 
In conclusion, effective change order management is vital for the success of construction projects. By following the dos and avoiding the don'ts outlined in this blog post, you can navigate change orders more smoothly, maintain positive relationships with stakeholders, and ensure the overall success of your projects.
 
Remember, change is inevitable in construction, but with the right approach, change orders can be managed effectively to benefit the project and all parties involved.
 
BARD

Change orders are a common occurrence in construction projects. They can be caused by a variety of factors, such as changes in the scope of work, unforeseen site conditions, or errors in the original plans and specifications.
 
While change orders can be disruptive and costly, they can be managed effectively if the following dos and don'ts are followed:
 
Dos:

• Get clear documentation of the change. This should include a description of the change, the reason for the change, and the impact of the change on the project schedule and budget.
• Get written approval for the change from all parties involved. This includes the owner, the contractor, and any subcontractors.
• Negotiate the price of the change in a fair and reasonable manner. Be prepared to compromise and be willing to walk away from the negotiation if necessary.
• Document all changes in the project's records. This will help to avoid disputes down the road.

Don'ts:

• Don't ignore change requests. Even if you think the change is unreasonable, it is important to address it promptly.
• Don't make changes without getting approval. This could lead to disputes and delays.
• Don't over-promise and under-deliver. Be realistic about the impact of the change on the project schedule and budget.
• Don't be afraid to walk away from a bad deal. If you are not happy with the terms of the change order, don't be afraid to walk away from the negotiation.

By following these dos and don'ts, you can help to ensure that change orders are managed effectively and do not derail your construction project.
 
Here are some additional tips for managing change orders:
 

• Involve all stakeholders in the change order process. This includes the owner, the contractor, the architect, and any other consultants.
  
• Communicate openly and frequently about the change order process. This will help to avoid misunderstandings and disputes.
  
• Be prepared to compromise. Change orders are often a negotiation, so be prepared to give and take in order to reach an agreement.
  
• Document everything. This includes the change request, the approval process, and the final agreement.

By following these tips, you can help to manage change orders effectively and avoid costly disputes.