Change Orders and How to Avoid Them

The phrase “We will need to create a Change Order for that” sends chills down the spine of every client. The thought of spending additional money, having the project delayed, and the general feeling of helplessness is not unfounded. Contractors have certainly not helped to make clients feel comfortable with this phrase.

The little known truth about change orders is that we as contractors hate issuing them. There are many misconceptions carried by the public about the use of the change orders in a construction project. The way in which contractors have used change orders over the years has not helped the situation.

You may ask yourself why we as contractors would actually hate change orders? After all, we make more money on change orders which is why we are in business right?

The reality is that change orders are not only painful for the homeowner but they are equally painful for the contractor. Here are a few reasons why we as contractors would prefer to never utter the words ‘change order’.

1) Change orders alter scheduling. When something does not go as planned or a change is made, it doesn’t only impact the cost. In this fast paced and ‘scheduled’ world, every minute is accounted for. When a request is made it requires that we stop whatever was planned, figure out how to make the change, write the change order, wait for a response and then move the schedule. This has an effect on everyone who was in the timeline to do something from the proposed change forward. This domino effect reeks havoc on the project schedule.

2) Change orders create pressure on the homeowner. When a project is planned out in advance there is very little pressure on the client to make snap decisions. This allows for thoughtful consideration of whether or not the item being priced is worth the cost. In contrast, change orders condense that decision making process into a very short timeframe. This pressure on the homeowner to make a quick decision can lead to frustration with and even distrust of the contractor. Clients can feel that they are being taken advantage of because of the take it or leave it nature of a mid project change. In general change orders tend to stress the working relationship between the client and the contractor.

3) Change orders are difficult to price correctly. The speed at which a change has to be priced so that the schedule isn’t effected further results in higher than normal costs. Acquiring the appropriate information for costs takes time. In lieu of the time needed, pricing is set so that it is safe. As renovation contractors we do not have a book that tells us what something should cost. Every house is different and every situation different. This variation results in pricing that protects us from loss.

Hints to reduce Change Orders

  • Plan, Plan, Plan- The better a project is planned, the less surprises and therefore the fewer changes. It is better (and cheaper) to have every detail figured out prior to a project than it is to figure out things as the project progresses
  • If an alteration or addition to the original plan has to be made, try and consider it long before the work actually needs to be completed. It is best to make a change to something that is happening in the future rather than change something that has already occurred. For example: It is much better to figure out your paint colors days before the painter arrives then to have him change a wall color he as already painted.

Change orders are an inevitable part of the building process. Understanding how they are created and the ramifications of the change will make for better project communication and a better end product.

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