What is a change order in construction?
A construction change order is a document describing an adjustment to the original scope of work determined at the start of a project.
Change orders can significantly affect project costs. They typically involve the addition of new work or an updated timeline.
Common change order causes
Any number of issues both preventable and unavoidable may necessitate the need for a change order.
Change orders are needed when:
Original estimates were inaccurate
There were errors made during the design phase of the project
Poor weather or safety concerns delayed tasks
Material deliveries are delayed
The project owner did not clearly communicate expectations
How to prevent change orders
The best way to prevent change orders in construction is to develop a thorough understanding of your capabilities as a contractor. Detailed field production tracking help project managers plan estimates and draft accurate bids, so your business can avoid change orders—and even worse, disputes or litigation—based on violations of contract terms.
Once project work begins, closely monitor progress onsite to catch potential causes for delays early. Identifying and correcting safety concerns and clearly communicating weather conditions to the project owner can prevent change orders and keep your project on track.
How to track construction change orders in the field
Follow these steps in the field to make sure change orders are processed as smoothly as possible:
Number the change order
Document the details
Specify the reason
Log materials and equipment needed
Use an extra work/change order checklist
1. Number the change order
When a reason for a change order is identified, create a potential change order number (PCO). This number should be unique and will be used to track the change order as it is completed.
2. Document the change order details
What kind of work is the change order for? Who requested the change order, and when did they request it? What work areas will be affected?
These answers should all be documented with the change order.
3. Specify the reason for the change order
Carefully outline the specific reasons for the change order.
For example, when working on the foundation of a new building a foreman may notice that measurements in the original design blueprints were incorrect after work has begun. The construction crew may need to tear down the work they’ve completed to make corrections, delaying the entire project.
This information should be included in the change order.
Likewise, if a material supplier informs the supply chain manager that a specific tile the project owner requested for flooring will not be available until well beyond the estimated finish date, the construction company should document all communications with the supplier in detail.
4. Log materials, equipment, and labor
Contractors should treat a change order just like any other part of a project.
You need to accurately estimate the time and materials the new work requires, and you’ll need to plan labor and equipment to make sure you have the crew and machinery available onsite you need to complete the change order work as scheduled.
5. Use a change order checklist
Using a change order checklist helps contractors make sure they leave no stone unturned. Instead of remembering all the details offhand, they can use the checklist to verify they have all the information they need to complete the work required by the change order and document it accurately.