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Three Easy Ways to Reduce Change Orders

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e-Builder.net 800.580.9322 info@e-builder.net | support@e-builder.net THREE EASY WAYS TO REDUCE CHANGE ORDERS EXECUTIVE SUMMARY An unexpectedly high number of change orders on a construction project can quickly exhaust contingency funds, delay the schedule and increase project costs. While some changes are unavoidable (e.g., change resulting from technology advancements, as is the case in hospital construction), many can be circumvented if the project team works collaboratively and relies on an in-place system that provides transparency and a disciplined process for approving changes. INTRODUCTION Change isn't always bad, but on a construction project, it usually isn't good. Change orders can wreak havoc on a construction schedule and raise project costs beyond the allocated budget. According to the April 2006 research study "Comparative Analysis of Total Project Costs with Versus without a Construction Manager" prepared for the CMAA Research and Development Committee, change orders can account for as much as 28 percent of total project costs. "Most organizations want predictability. They set budgets and schedules, and change orders disrupt both of those," explains Charles Thomsen, FAIA/FCMAA, an industry consultant and author. The causes of change orders are almost limitless; however, most fall into one of the following categories: § Errors and omissions in plans or specifications. § Unforeseen site conditions. § Owner requests. § Advancements in technology. § Code changes. § A late-arriving epiphany. Before a problem or opportunity necessitates a change to the original construction contract, it usually passes through a few phases: 1. An issue arises that creates the potential for a change order. 2. A formal claim is made and submitted. 3. The claim is accepted between all parties and becomes a formal change order.

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