How to Manage Change Orders in Your Construction Project

In construction projects, deviations from agreed baselines, approved drawings and construction specifications are very common. They are actually part of the typical course of any construction project. Unfortunately, they are also one of the major sources of construction disputes among contractors, designers, and project owners. These deviations are technically known as change orders, associated by many with having negative time and cost implications on construction projects.

It is impossible for the construction industry not to have change orders. However, in any construction project, contractors, clients, and designers will find that if change orders are managed via a clear, written plan, the resulting implications will be less severe and there will be a lower number of construction disputes.

There are a variety of reasons for initiating change orders, such as drawing and specification changes, inaccurate specifications, unforeseen causes of delays, lack of coordination between contractors and consultants, and so forth. Nevertheless, if you integrate a system of change management principles into the culture of your organization or construction team to deal with change orders systematically, you will effectively moderate the risk of disputes on a long-term basis. Additionally, simply taking some precautionary measures prior to committing to any construction project will also save you from a lot of trouble throughout the implementation stage of the project.

Develop and Implement a Change Management Plan

To institutionalize the practice of handling change orders in a systematic way into the fabric of your construction team or organization, you can begin by developing a change management plan. A change management plan developed for a construction project sets out the activities to be followed in the handling of change orders and the roles and responsibilities of each of the involved personnel.

During the execution stage of a construction project, when a change order occurs, it is measured against the project baseline, which is a written, detailed description of the scope, budget, and schedule of the project. The main objective is to control the effect of the change, preventing an undesired overrun in the budget and schedule and avoiding work of poor quality and unwanted discrepancies between the scope of work and actual work performed.

If you are the main contractor of a construction project, you should find out from the person in charge, such as the superintendent acting on behalf of the client, if there is a change management plan in place that you are obligated to follow. On the other hand, if a client appoints you as the managing contractor, you will need to develop a change management plan for the construction project to the benefit of the client.

A change management plan should start with the identification of the driving project constraints, which can be related to the scope, schedule, budget or quality. As a change is managed, the driving project constraints will be the overriding factors in deciding upon the outcome. The plan should also indicate the types of changes that are to be tracked, the probability of the occurrence of a certain type of change, the amount of resources required for plan implementation, the roles and responsibilities of the involved personnel, and the guidelines to be followed in evaluating and communicating a change.

Generally, there is no specific format for writing a change management plan. The more you do, the better you will get at developing one.

Evaluate Your Construction Contract Considering The Possibility of Change Orders

Before you agree to commit to a construction project, a thorough evaluation of the construction contract will help you avoid many construction-related headaches and problems down the road. The contract should stipulate how changes to the project baseline are to be managed. The project baseline includes the project’s schedule, budget, and scope of work, and it may also include the contract conditions.

Additionally, checking the time frame stipulated in the contract in relation to dealing with changes – a construction contract typically specifies the time period within which an identified discrepancy must be reported to the person in charge – is also essential. You must know to whom you should report a potential change, how you should report it, and the relevant time requirements.

Check Every Tender Drawing and Specification

Regardless of the number of documents, drawings, and specifications contained in a set of tender documents you have received, you should check every drawing and specification, reviewing all the plans to ascertain if there are any errors, ambiguities, or omissions that may pose issues during the project implementation stage.

Delays resulting from the need to revise tender documents are easier to manage and less costly. If you just let the error slide and attempt to deal with it at a later stage when the construction is ongoing, the process will be far more costly and time-consuming.

Consider Getting a Construction Management Program

Last but not least, you can streamline your change management process using a comprehensive construction management program that comes with the functionality of dealing with change orders. There is a plethora of construction management applications and tech solutions, and having your change management process digitized and streamlined with the use of software specifically designed for construction management will probably be one of the best management decisions you have made. With the use of a digital application, handling a change order is less cumbersome and more efficient in comparison with the traditional pen-and-paper method.