Why do change orders happen? How do I keep them small?

When building a construction project, budget challenges often come into play, leading to change orders during the construction process. There are a few key steps to managing a change order process in construction that can ensure they don’t balloon out of control or delay your project. 

Is a change order normal? 

The Associated General Contractors of America define a change order as “an official change of any kind in the original scope of work or terms of a construction contract agreed to by the owner, contractor, and project designer.”  How can you avoid construction change orders? You likely cannot, so it’s best to learn how best to manage them effectively. Change orders can often lead to confusion, schedule delays, and tension across partners teams. Why do change orders happen? Large projects require management of hundreds of processes across dozens of trades, and unforeseen circumstances often arise that are often out of any one party’s direct control. Change orders are a normal part of the construction process, but there are methods you can use to make sure they don’t take a high-performing project off a clear path. 

Protect your partnerships 

The worst-case scenario of a change order is that partner teams begin to assign blame before understanding the solution to a potential change order challenge. Trust is immediately eroded, and so your team dynamic. Your job is to protect the team dynamic.  Procore outlines key aspects to team dynamics that place accountability and trust as a keystone to building high-performing project teams. The best course of action is to protect the partnerships you have and investigate the cause of the change order and ensure that throughout the change order process, you’ll approach the client as a united front.

Back it up with Data

Clients today have data at their fingertips and expect changes to come with data-backed justifications. Instead of coming to your client with a problem to solve, approach them with the data to support why the change order is needed and how it will be resolved. An example of this might be a structural beam uncovered during demolition that requires a plan change, requiring the architect to submit a change sketch and some rework of partitions in progress of being built. The best way forward would be to come prepared to discuss how the obstruction was discovered and a few options with associated costs for how to move forward. And this brings us to our next point …

Communicate Clearly

JLL cites change order mismanagement as a common construction hiccup that can be avoided with clear communication to the client. We already outlined how data can be your friend in laying out a case for a change order. But how and when that case is communicated might be your most important step in gaining the actual approval for the change order from your client. Flagging a potential issue while you’re investigating gives your client a heads up that you might be experiencing challenges, which helps them be less surprised later. Communicate an ETA on when you’ll be able to share more and assure them that you won’t allow delays or overruns to occur without their prior knowledge. As you frame the possible solutions with costs associated, make sure you remove unneeded jargon and communicate in a way that’s easy for someone not in the construction industry to understand. Give your client a maximum of three choices, and include a strong recommendation that is aligned across your partner teams that keeps the client’s interest at the forefront. Communicate clearly how the change order will be managed, if there are negative timing and cost impacts, and tell them with certainty when you’ll have the change order resolved once it’s approved. Your client will thank you for your transparency and directness, which in turn builds trust and loyalty. 

Turn your Change Order into Trust

Change orders are a necessary part of any complex project, but with a few key strategies, they don’t have to cause time delays, tension, or disarray on your project. With a focus on protecting your partnerships, taking a data-backed approach, and communicating quickly and clearly, you’ll not only get the change order, you’ll gain your client’s trust that you can weather a challenge as a leader and trusted partner. Check out our process for more info.