What is a Construction Change Order?
A Construction Change Order is a document which details changes in the original agreement of a construction project. Unlike informal communications between contractors, this document provides an official record of alterations to the contractual obligations. Such as changes in budget, labor, timeline and materials. This paperwork not only helps codify adjustments but can also enable parties involved to make sure they are on the same page.
It is important that all parties understand the scope of changes prior to signing off on them. Changes should be clearly articulated and discussed amongst those who will be impacted by its implementation. Ultimately, a Construction Change Order can help create an organized and efficient process throughout the project’s duration.
Reasons for Using a Construction Change Order
Using a construction change order is beneficial for both contractors and clients during the process of completing a building project. When changes are made to the initial contract, due to unforeseen circumstances or the need to accommodate customer requests, documenting those changes through a construction takeoffs change order services can help ensure that each party understands what was decided upon.
In addition, having a document like this helps minimize disputes over costs resulting from the changed plans. It also provides clients with proof needed in case there are any issues with their project, such as if certain tasks were completed off-specifications and need additional revision.
Finally, construction change order documents can serve as protection against customers who dispute payment for services rendered, providing recourse about how payments should be allocated for certain changes.
Ultimately, using construction change orders can help make sure that any modifications that come up throughout the course of the work are handled efficiently and protect both parties from potential financial loss.
The Process of Creating a Construction Change Order
-
write a contract
The process of creating a construction change order is one that should be taken very seriously, as it is a legally binding document. The first step in the process is to review the existing contract and its specifications thoroughly, if applicable. This will help inform both parties of the terms that have already been agreed upon and provide an understanding of what exactly may be altered with a change order.
Once any necessary revisions have been made, all costs related to such changes must then be outlined using accurate cost estimates, detailing labor and material costs for each trade required for the job. With all of this information collected, a construction change order can be generated and executed.
-
Review the Project Plan
With this step, the construction team can assess any potential changes in functional requirements of the project. This will help to identify any modifications that need to be made to meet expectations while also staying within budget and timeframe constraints. Doing this before construction begins is an invaluable part of the industrial construction change order process. This helps to ensure projects are completed accurately and efficiently.
-
Communicate with the other parties
Next step in the process is to ensure that everybody affected by the change is present for any important meetings so all issues can be discussed. Depending on the size of your project, this could include subcontractors, vendors, clients, and other stakeholders. All parties should be briefed up-front on what will be expected of them during the conversation. This way they can provide input to prevent costly and time-consuming mistakes during the construction process.
-
Obtaining Signatures
The process of creating a construction change order is an important task that requires attention to detail. Once the change order has been created and agreed upon, it must then become legally binding with the approval of all relevant stakeholders.
Obtaining signatures to make the change order legal is an essential step for every construction project. This can involve signing off from the contractor, property owner, architect, engineer or any other party who may be involved in the job.
It’s crucial to have everyone sign off on a change order regardless of monetary impact so that all parties are in agreement with what is being done on the project site. Lastly, signed copies should be distributed to those who participated in obtaining them in order to provide evidence of approval.
Tips for Managing Construction Change Orders
Develop an Approved List of Changes and Costs
Managing construction change orders is a challenging process, and there are numerous steps that must be taken to ensure that costs remain within budget. One of the most important tips for effectively managing construction change orders is to develop an approved list of changes and associated costs prior to beginning the project.
This list should cover all potential alterations and cost concerns to remove any surprises mid-construction. This can help create certainty if disagreements regarding the scope or cost of a change arise during or following completion.
Additionally, developing these plans early establish expectations for teams working on the project, helping reduce future issues due to differing interpretations of what was agreed upon. Overall, establishing an approved list of changes and costs before work begins can be beneficial in helping manage construction change orders.
Use a construction change order software
Managing construction change orders can be a time-consuming process, but it doesn’t have to be. Software solutions have emerged that can take care of all the tedious paperwork associated with change orders in construction contracts. Having Commercial construction change order software simplifies the process and allows construction companies to get jobs completed more quickly and efficiently.
Using construction change order software also makes it much easier to keep track of changes. It also prevents confusion or miscommunication as well as costly mistakes. And tracking progress is easier so you can stay informed on project timelines. An organized system puts construction projects on track. Eficient construction change order software equals improved accuracy, better communication, and cost savings overall.
Track All Changes to Avoid Cost Overruns in the Project Budget
Managing construction change orders is an important part of any building project. It is important to track all changes to ensure that the project is completed within its budget. This includes changes in material, labor costs, and more.
Keeping careful records of each change will enable project managers to keep an eye on potential cost overruns. Additionally, with accurate records of each change, it will be easier to review contracts or submit claims. Clear, organized documentation will help manage change orders and avoid unexpected expenses at the end of the project.
Use Change Order Template
Change orders are an inevitable, yet often unwelcome part of many construction projects. Whether due to:
- schedule delays
- material availability
- other unforeseen events having a plan for managing change orders is key for success.
One effective tool for managing change orders is the use of specific templates to document each request.
By having a comprehensive template in place that covers all factors of the proposed changes, it will help both builder and client keep track of their commitments. This will ensure that any agreements are both accurate and thoroughly discussed before being put into effect.
Change order templates also provide evidence of agreed-upon terms should a dispute arise down the road. Taking the proactive step to plan for change order management will ultimately help your project succeed and keep costly misunderstandings from arising.
Conclusion
Change orders are essential for any construction project, as they help to ensure the job is completed on time, and to the desired level of quality. They allow contractors to adjust pricing and scope when unforeseen circumstances arise.
When properly tracked and managed, change orders help avoid costly delays. Legal disputes that can arise from providing outdated quotes can also be avoided. Properly developed change orders provide a transparent roadmap that ensures timelines, safety practices, and cost management.
