Change orders are one of the most common elements of construction projects, and managers anticipate them from day one. However, they are daunting as well because they can topple the project schedule and budget. A study indicated that change orders resulted in average cost overruns of 11% to 15% while pushing work up to 20% past the scheduled timelines for completion.
While change orders are a reality, managers can make extra efforts to reduce them to the minimum. Additionally, tight control on budgets with cost control software in construction can keep things on track even when change orders arise. Here are some simple steps that businesses and managers can implement for better change order management and tighter cost control.
Start with a clear scope of work
A lack of clarity about the scope of work for the project is the biggest culprit leading to change orders. Starting with a clear statement of work prevents the issue. Ideally, it should have well-defined specifications on the development, implementation, evaluation, and final delivery of the goods and services. Further, it must also include essential elements like the work to be performed, timeline, deliverable schedule, location, and performance standards.
Ensure compliance at all levels
Having a well-defined scope of work does not mean that contractors can sit back and relax. They also have to ensure compliance at all levels, from the top stakeholders to the subcontractors. The role of contractors is crucial in this context as they need to make sure that the goods and services supplied by the subcontractors are at par with the subcontractors. If they fail to do so, the risk of change orders falls on the business even if they aren’t directly responsible for the issues.
Have a change order process in place
Having a process to manage the change orders is equally vital. Ensure that the contract documents have a process for authorising, initiating, performing, and paying for it. Starting with a process upfront can prevent disputes and unauthorised change orders in the long run. Integrating it with cost control software is a good idea to cover the budgeting element within the process. The idea is to get an outline of the steps that the manager will have to follow once the order comes.
Coordinate the entire project elements
When it comes to completing construction projects successfully, good coordination between various elements is vital. The absence of coordination can lead to errors, which elevate the chances of change orders in the project. It makes sense for the contractors and managers to go the extra mile to ensure seamless coordination between the moving parts, no matter how complex and large in number these are. Missing even a single detail can have a daunting impact, so they have to make sure that everything is covered.
Pay extra attention to design
Even as managers coordinate the project elements, design always remains paramount when it comes to curbing change orders and the associated costs. Ensuring that the contract documents have adequate details about design can make all the difference in preventing deviations during actual implementations. At the same time, the architect needs to make sure that the design is coordinated closely with the various disciplines of the project, such as plumbing, drainage, electrical, and more.
Include a quality control process
Change orders are not always linked with design deviations; they may also arise due to quality issues. Having a quality control process for the entire levels and stages of the project can limit this possibility to a significant extent. Essentially, the quality control process should cover the key elements such as technical documentation, design process, specifications, inspection reports, and other procedures in the contract requirements. Having a quality control process is only half the work done. The project manager also needs to implement proper control with regular inspections.
Transparency is perhaps the most significant element in project management. Ensuring transparency right from inception to completion enhances accountability, communication, and task ownership, which boosts the overall performance of the team. The implementation of construction management software enables complete transparency in projects, even without additional elements. A cost control software platform, on the other hand, drives transparency in terms of costing and budgeting processes.
Preventing change orders may take a lot of effort, but it is still doable. Moreover, the effort is worthwhile as it can curb wastage of money and time. When a business is able to achieve these objectives, it can boost its profitability and reputation organically.
Change orders are an integral element of construction projects and can cost time and money. While managers cannot eliminate them completely, it is still possible to reduce their impact to a minimum. Controlling the associated costs is also possible with the implementation of construction cost control software.