Construction Change Order Best Practices & Why they Matter
In construction projects, it is common for changes to occur throughout the construction timeline. These changes may include modifications to the blueprints, alterations to the material selection, or additions to the project scope. These changes are known as change orders and require specific procedures to ensure a smooth transition.
What is a Change Order?
A construction change order is a written document that formalizes the changes made to the construction project. This document outlines the modifications made to the original plan and serves as a contract between the client and the contractor. Change order management in construction ensures that both parties agree to the adjustments and that there is a clear understanding of the updated cost and timeline.
Change orders in construction are necessary to maintain transparency and accountability in construction projects. Without change orders, any changes made could lead to confusion, disputes, and legal issues. Change orders provide a clear record of alterations to the project scope and protect both parties from potential risks.
Common Challenges of Change Orders
One of the major challenges of construction change orders is the lack of clarity in documenting the proposed changes. If the change order documents are ambiguous or incomplete, it can lead to misunderstandings and conflicts between the project stakeholders e.g. missing lien waivers. It is essential to have a clear and detailed scope of work that clearly defines the changes requested and the impact on the project schedule and budget.
Construction change orders can also significantly impact the project’s budget and schedule. When changes are introduced, there is often a need for additional materials, labor, or subcontractors, which can lead to increased costs. Additionally, these changes may require rework or modifications to already completed work, causing delays in the project schedule.
To address these challenges, it is crucial to establish a robust change management process.
This process should include thorough documentation of change order requests, including detailed descriptions, the rationale behind the changes, and their potential impact on project milestones and costs. This documentation should be reviewed and approved by all relevant parties to ensure that everyone has a mutual understanding. These top change order management practices will help ensure that general contractors can speed up the change order process, measure impact, mitigate risk, and save money.
Top 10 Change Order Practices
Change orders are a crucial part of any construction project. They provide an avenue for project stakeholders to adjust the scope of work, timeline, and budget as the project progresses. However, change orders can also lead to costly delays and disputes if not managed properly.
Here are the top 10 change order practices that can help you avoid these issues and keep your project on track.
Establish a clear change order process. From the start of the project, establish a clear change order process that outlines the steps for requesting, reviewing, approving, and implementing changes. This process should be communicated to all stakeholders and adhered to throughout the project.
Include a timeframe for change requests. The change order process should include a timeframe for submitting change requests, such as a deadline for submitting requests before a specific phase of the project.
Assess the impact of changes on all project aspects. Each change order should be evaluated for its impact on the project’s budget, timeline, schedule, and resources. This analysis can help determine whether a change is feasible and how it should be implemented. It is essential to evaluate the proposed changes thoroughly. This evaluation should include a comprehensive cost estimate and an analysis of the potential impact on the project schedule. It is crucial to communicate these impacts clearly to the client to manage expectations and seek their ap
Obtain written approval from all parties. Each change must be approved in writing by all relevant parties, including the project owner, contractor, and subcontractors. This mitigates the risk of disputes or misunderstandings down the road.
In conclusion, change orders in a construction project are inevitable. They serve to formalize the modifications made to the original plan, outlining the updated cost and timeline. By establishing clear procedures and documenting everything, both parties can ensure a seamless construction process and avoid disputes. How change orders are managed and executed can have a significant impact on the project’s overall success. By following these top 10 change order practices, you can minimize avoidable disputes, keep your project on track, and ensure its overall success. An easy step to accomplish most best practices is to find payment application software that automates, communicates, and documents change orders between general contractors and subcontractors. GCPay can complete these things and much more! Feel free to contact GCPay to schedule a custom demo to see just how the right software can accomplish multiple goals at once.
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