When you’re a contractor, one of the phrases you probably dread hearing the most is, “I just want to talk about a few small changes…” You know that there’s no such thing as a “small change” when it comes to revising a project’s plans, whether that has to do with the materials, the design or anything else. When change orders pile up, you can quickly find yourself over budget and way behind on your timeline for completion.
Few construction projects, especially large ones, get by without at least a few change orders, however, so it’s critically important to know what you can do to keep change orders under control.
Document everything
Never rely on verbal understandings and handshake agreements, no matter whether you’re talking to the property’s owner or a subcontractor. Change orders are often begun with verbal conversations – and they may even be approved that way. However, before any of the changes are implemented, make sure that you have a written agreement that lays out everything that was discussed so that there’s no room for dispute later about what’s supposed to be changed and how.
Clarify consequences
You need to make sure that everybody understands how the change order affects the project’s timeline and costs. You may need to identify any additional labor costs that will be incurred as a result of the change orders, along with any material costs. If the work goes beyond the original scope of your bid, your agreement needs to cover your additional compensation, as well.
Don’t proceed until you have everything in place
Change orders may need to be signed by multiple parties, including the property’s owner, your subcontractors, the architect and others. Identify everybody who has an interest in the project’s timely completion and make sure you have their signed agreement before you move ahead with any changes. Otherwise, you could be opening yourself up to significant liability. It’s better to stop work entirely than proceed with unauthorized changes.
If you end up in a construction dispute due to a change order, seeking legal guidance may allow you to more efficiently and effectively arrive at a resolution that works for everyone.