Situations That Might Trigger a Change Order Request
The reasons behind construction change orders vary from project to project. Due to scope changes, unforeseen conditions, and other situations, a change order is an official request for additional time and funds in order to complete revised contractual obligations. Change orders can be a headache when the complexity and timeframe of the requested addition impose schedule constraints. Therefore, change order management should be included with every contract, as changes often can lead to legal battles, disputes, and arbitration.
Errors or Omissions in Drawings
The most common reason for construction change orders is errors or omissions in the project scope. Inadequate details, misrepresentation, or failure to prepare a complete set of detailed drawings can lead to serious change order requests. Errors and omissions can occur with the building design as well as the land or environment where the construction is sited. To prevent these common problems, it is important to review all contract documents and verify that the owner-provided information is accurate and adheres to the latest standards and specs.
It's not uncommon for builders or developers to start a construction project without a complete scope of the project or without final drawings. This type of error is perhaps most common on design-build projects, where the ongoing process of design can lead to work stoppages and cost overruns. Design changes can lead to stopping work orders or even cause labor issues due to delays in project execution. Both situations can have a significant impact on overhead costs.
Sometimes the construction drawing asks for one product, but the specs call for another. This situation is very common on construction projects where the drawings are assigned to different consultants, each one of them acting on their own, without any kind of direction from a team leader. This can lead to a situation in which the contractor quotes on one article, while the owner insists on a different article when it's time for the article to be installed.
A soil problem is the most common type of unforeseen condition and usually results from a failure to perform a complete soil boring. Soil studies can lead you to expect some conditions based on specific testing criteria, but as the soil profile varies, it might present additional challenges and soil types throughout the site. Assumptions about soil conditions or other issues regarding the construction of the project can be different from the actual conditions found on the site.
Contractors often make substitutions when specified materials are not available or when there is a shortage of supplies. This can lead to a change order or even a different issue: a request for a credit if the cost of the substitute material is less than that of the specified material. In this case, the contractor may need to make up the difference in cost between the different materials or products. In other situations, the owner asks for upgrades during the construction process. This request should initiate a change order for extra compensation and time associated with the proposed modifications.