How can you explain the impact of a change order to your client or contractor?

Change order could increase the cost of the project or decrease it. We use the term positive change order or negative change order. Same thing applies for increase in schedule or decrease in schedule. CO could be easy to handle when the contract explains the way they should be handled , initiation, quantification , agreement and application. Usually contracts contain a unit rate price list to be used when applying CO. This price list is used fir contrats values less then 10 % of the original contract. CO application could be source of conflicts, arguments, frustrations, that could lead to schedule delays and claims.

1. Identify the need for change: Analyze the project requirements and identify any necessary modifications. This could result from unforeseen circumstances, client requests, or changes in regulations. 2. Documentation: articulate the proposed modifications, include the reasons behind them, the impact on project deliverables, and any associated costs or time. 3. Assess the feasibility and impact: Evaluate the feasibility of implementing the CO. 4. Seek agreement/approval: Collaborate with all relevant stakeholders, including the client and any other affected parties and secure formal approval before proceeding. 5. Revise the contract: Update the relevant sections of the existing contract. 6. Communication: keep all relevant parties informed.

Change orders are extremely important and necessary. It not only gives transparency to client and contractor but also ensures execution at the right specifications. Further it gives clarity of cash flow required for both parties at all times of the project. More importantly it avoids or reduces risk of any arbitration that could otherwise happen in project and can lead to even losses due to delays in execution.

Change order may have an impact on the duration of work. In the case of extra work there may be a request of extension of time with cost by the contractor. Anyway the program of work will have to be revised.

Change order plays a crucial role in the contract and purely depends on the magnitude of the scope change which has a deep drive in the contract, A major delay in releasing a change order will impact cost overrun, increase in overhead expenses, delay in payment, quality and productivity degradation, procurement delay and rework.

Explain the impact of not making the change. Would it be possible to implement this change after completion of the contracted works?

Openly discussing benefits and risks in change order help to establish transparency and trust. Additionally, proposing mitigation strategies for potential challenges demonstrates proactive problem-solving, showcasing individuals commitment to managing the project effectively despite changes. Some benefits and Risks in that are as below. Benefits would be Improvement in Quality, Help in Addressing Issues or Requests, Functionality Enhancement, Adherence of Safety and Compliance and Long-Term Benefits are linked to it Risks and Challenges are Delays and Disruptions, may be Additional Costs, extra Resource allocation and Impact on Other Tasks may be linked

Something to consider from a Trade subcontractor perspective. It's essential for trade contractors who offer prefabrication to notify the construction team of the schedule impact and cost implications if that portion of the project has already been signed off and product fabricated. Then the cost will potentially increase the cost x2 on project/funding. Possibly 2x on schedule impact for now you are buying and building 2x.

One major benefit of a Change order is to record the change. This enables the other steps such as calculating the delays and additional costs etc. The Risk of working without a Change order is not getting paid and absorbing all the concurrent delays

Una orden de cambio, puede ser el resultado de una mala formulación y dise?o , pero no siempre es así.Hay ocasiones q son necesarias debido a imprevisto o ha cambio de condiciones contractual por la naturaleza del sitio de obra no previstas, también esta Ordenes de cambio se originan por afectación de índoles de la naturaleza como huracán, terremoto o problemas políticas.

Make sure everyone who will be pricing change orders clearly understands the "costs" as defined in the contract documents and expected from the client. This is where I most often see the change order process break down. On a large project with multiple subcontractors there may be dozens of different individuals preparing their portions of the change order pricing. Frustrations over what is included in the "costs" and what is not can lead to delays in processing change orders and getting the appropriate parties compensated.

As a reviewer of change orders I always want a complete breakdown for both labor and any parts required. The mistakes can be something as simple as charging for a more expensive or less expensive type of pipe required or a miscount in fittings. All simple and understandable errors but unless you ask for the complete breakdown you will not be able identify and anomalies.

A clear and well defined Cost estimating plan and process, outlining a clear breakdown of costs for the integrated project team to adopt, should be followed to produce a robust, assured and transparent cost estimate for the change order which can be used with confidence to support successful delivery. All parts should adopt the same templates and procedures to ensure consistency and traceability of cost (manage expectations from the start of the project). Orders Change are usually funded from Contingency and/ or as a result of requesting additional funds.

Managing the expectations is key at change orders. What is the impact of the project schedule , cost? Those must be clearly defined as earliest as possible (usually 5 working days depends on contract) For the sake of the project, not to hesitate informing customer/client about ramifications with all transparency.

One of the best ways to keep a proper budget when changes occur in a project is to: -Use AIA 702-703 or Similar Documents -Breakout Each Cost -Break Out Material -Break Out Labor -Break Out Retention % per Contract -Break Out Tax -Break Out Overhead -Break Out Extended Cost -Break Out Profit Margin -Get Granular in Break Out -Break Out the Hours X Guys you have in for each project cost to stay on budget

A change order can have a significant impact on the schedule, milestones, and deadlines of a project. Changing the sequence or priority of the activities, may alter the critical path and the dependencies of the project. The critical path is the longest sequence of activities that must be completed for the project to finish on schedule. The dependencies are the relationships among the activities that determine the order to be performed. Requiring addition resources such as labour, material, or equipment can affect availability and quality of the project.

A change order requested by a client can impact the project schedule in several ways. It requires a time impact assessment, schedule adjustment, and potentially the identification and allocation of additional resources. Changes can also affect task dependencies, require communication and coordination efforts, and potentially lead to a reassessment of project priorities. The approval process for the change order may introduce additional delays. Prompt assessment and communication of schedule impacts are important to manage expectations and minimize disruptions.

In my experience, Change Orders are a necessary means to facilitate a change to the contract, whether it be for scope of work, schedule and or the project spend. The triggering event must be properly prepared, that someone not a construction expert or affiliated with the project can fully understand the change order. Not enough classroom or on the job training is dedicated to this necessary contractual process. If the construction industry is to grow, and attract young construction professionals, we must pass along the knowledge of how and why the administrative (paperwork Change Orders) are properly prepared. Change orders not properly prepared in a timely manor, may run a risk of loosing the trust of the customer and future business.

Best practices in cost planning will build sufficient ''budget resilience'' within Programme/Project Risk, Trends and Contingency to manage any impact on completion date. A time impact analysis is a method used to determine the extent of the impact?that a?delay?or?change order?will have on the overall project timeline. This is a “forward-looking” analysis since it examines the impact of events that have already occurred or are currently occurring. A time impact analysis will be most effective for projects using the critical path method for scheduling. Overall, improving change order management helps reduce costs and schedule disruptions.

Schedule impacts can significantly affect the critical path in construction projects. Delays or changes to activities along the critical path can extend the project's overall duration. This is because the critical path represents the sequence of tasks that, if delayed, would directly impact the project's completion date. If an activity on the critical path is delayed, it can potentially delay subsequent dependent tasks, pushing out the project timeline. Efficient project management and proactive identification of potential delays are crucial to minimize the impact on the critical path and ensure timely project completion.

Having a clear and quick approval process is critical to the success of a project. The more successful projects are those that have contingencies that are allocated to the project and “pre-authorized” to spend on issues as they arise. Many clients and designers often do not understand the amount of planning and coordination involved to put a change in motion and coordinate with all impacted trades. It is important to understand materiality of changes. A successful project cannot afford to lose days or weeks chasing rounding errors in immaterial amounts on a change order. The more successful relationships are built on trust that an informal approval can put a change in motion and will follow up with formal documentation of change.

Listening attentively to their opinions and perspectives is not just a step; it's a cornerstone of successful project outcomes. Addressing objections or disagreements head-on demonstrates a commitment to finding solutions together. Reminding stakeholders of the benefits and risks, and how the change aligns with the project's overall goals, adds a strategic layer to the discussion. It's about ensuring everyone is on board and understands the broader picture. Clear communication on the approval process, timeline, and a formal request for signature underscores professionalism and transparency. It's the final touch in a process designed for clarity, alignment, and project success!

Las ordenes de cambio siempre deben de pasar por un proceso de aprobación el cual debe de partir por ciertos involucrados clave y en medida que la orden de cambio se presente bien documentada, bajara en índice de comentarios y dudas de los clientes.

The quality of the change order plays a role in the timeframe for approval. A detailed change order would help the client understand the reason for the change, breakdown of costs, the impact on the delivery of the project and other aspects of the project. The originator of the change order should be flexible and willing to accept criticisms that would help improve the project.

For most projects with a General Contractor, they will automatically suggest some solutions that will work in construction projects. Always get a sign off of approval before proceeding.

Always request more time where a project change order occurs. You have budgeted for the original plan set before the change order was implemented. Especially when the change is significant. Also keep a separate record of the original before the change and one after the change. Maybe, even provide a draw down or sample of the product to if its changed before proceeding with the job. A GC can sign the actual sample or draw down for approval, or a document, or via email. But always get the lead sign off never another subcontractor.

It's crucial to manage change orders effectively in projects. Your outlined steps, from reviewing scope to client submission, form a comprehensive approach to navigate both opportunities and threats associated with change orders. Ensuring a thorough analysis of contractual obligations, scope and estimating impacts contributes to successful negotiations for change order approvals. it is equally important to document the root cause, communicating it to the teams and ensuring effective implementation of corrective actions across the value chain.

By documenting the change order process comprehensively and disseminating the information to relevant stakeholders, you ensure transparency and alignment across the project. Tracking and reporting on the change's performance allow for proactive adjustments if needed, contributing to the project's overall success.

After obtaining approval for a change order, here are steps to follow up and document the change order process: 1. Update project documentation 2. Communication with stakeholders 3. Financial tracking 4. Monitor schedule changes 5. Quality assurance 6. Regular progress reports 7. Risk assessment 8. Documentation of lesson-learned 9. Client and contractor collaboration 10. Final documentation near completion 11. Archiving the relevant documentation for future reference By diligently following these steps, you ensure that the change order process is well-documented, and that all stakeholders are informed about the project progress post - approval. This documentation also serves as a valuable resource for future projects and audits.

Change orders should be tracked the same as any other line item of work to avoid omitted, or unsatisfactory workmanship. This will also insure that the change order work is integrated into the overall schedule and flow of work.

Remember. Engineers or Contract Administrators generally are given the power to vary the works but not to vary the manner of doing the works. Example from long back where the engineer instructed the contractor to change the location of site huts. When the contractor tried to recover the associated and fully demonstrated extra costs he failed as the engineer was acting beyond his powers.

Successful change order management begins with thorough and thoughtful definition of the original work scope and functional contract terms. Without those in place before work begins, changes veer off into bad territory almost immediately.

Project changes are inevitable. Unfortunately most of the time the scope increase change leads to a cost increase. Those new to the game get caught by surprise by number. Typically no matter what the number it’s always too high. The best action a PM can take is to throughly document the change and the reasons for it. In addition, early warnings help prepare the client for what could be coming.

When presenting a change order, it's vital to thoroughly explore alternatives with supporting documents before finalizing the proposed modification. Begin by outlining various solutions, assessing pros and cons for each, considering factors like cost, schedule, risks, and overall project benefits. Evaluate feasibility and alignment with project objectives, actively involving the client or contractor in collaborative decision-making. Clearly articulate why the proposed change is the preferred option, addressing potential risks and long-term implications. Formalize agreed-upon changes in a comprehensive change order for a transparent and well-documented implementation process.

change order should including the following documents -Summary sheet explaining the reason and the impact of change order -Compassion sheet to show the changes between old and new drawings or scope or the addition and omission of the scope -Breakdown and cost analysis( Materials , time , rates, etc - Three Quotes at least to justify the new rates related to change order -Demonstrate the Impact on the critical path (window analysis) -Cost associated with time impact -Mitigation plan to identify the measures taken to reduce the cost and the time. -Notifications and correspondences related to change order. -Options to reduce the cost (value engineering) and the time (change the construction sequence). -Meeting with client