What Three Things Must Be Agreed Upon for a Change Order in Construction?

Change Order on Wood Table

As a construction project manager for over 10 years, I have seen firsthand how important change orders are to project success and adaptability. They are not just paperwork; they are strategic tools that ensure the effective development of the project, even in the face of unexpected challenges. Let me walk you through three critical aspects that must be agreed upon in a change order based on real-life examples I’ve encountered in the industry.

1. Detailing the Scope of Work: Precision is Key

A scope of work for a change order is not simply a list of changes; it’s a plan for moving forward. The scope of work describes the details of what will change in the project. For example, in a recent high-rise project in Tallinn called WOHO towers, we had to switch from specific marble to granite in the lobby due to supply issues. The change order did not only include a substantive change; this included the type of granite, the source, the difference in cost, and the effect on aesthetics and durability. This level of detail helped avoid misunderstandings and kept everyone on the same page.

2. Price Adjustments: Transparency Leads to Trust

Changes often come with a price tag. The change order must clearly detail how these changes affect the project’s overall cost because price adjustments can make or break the client-contractor relationship. Transparency here is non-negotiable. On a residential project last year in Tallinn, a client requested an additional patio space mid-construction. The change order detailed the extra costs for materials and labor, along with a breakdown of how this would affect the overall budget. This clarity helped maintain trust and avoid disputes later on.

3. Revised Schedule: Realistic Timelines Foster Credibility

Any change in the scope of work will likely impact the project timeline. The change order must reflect this by proposing a revised schedule. It is important to mention that altering the project timeline is a delicate task. It requires setting realistic expectations to maintain credibility. In a commercial renovation project I am working on, incorporating an advanced HVAC system requires more time due to its complexity. The revised schedule outlined in the change order considered the installation time, testing, and potential delays, providing a comprehensive view of the project timeline’s extension. This approach helped manage client expectations and kept the team focused.

Conclusion

From my experience, the scope of work, price adjustments, and revised schedules must be agreed upon before issuing a change order. These elements help you ensure that the change order is processed correctly and no unexpected issues occur in the future. I recommend using construction management software with comprehensive change order management features like Bauwise, where you can create, track, collect, and approve change orders in one place. When creating a change order in Bauwise, you must process all the aspects we discussed above to ensure that all three things are agreed upon when approving the change order. Remember, a well-managed change order can be the difference between a project that merely adjusts and one that evolves and thrives.

Written by

Taavi Kaiv: Bauwise customer success manager

Taavi Kaiv

Taavi Kaiv is a construction specialist with over ten years of experience in the construction industry. Taavi is an accomplished construction project manager with many successful projects that have been completed under his guidance. Taavi holds a master’s degree in construction management from the Tallinn University of Technology. View profile

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