Construction projects inevitably experience changes as they progress. How these changes are managed through proper change order procedures is crucial for maintaining budget, schedule, quality, and good relationships between project stakeholders. Here are some of the key reasons why effective change order management is so important for construction projects:
Controlling Costs
Changes almost always incur additional costs, either from extra materials, labor, or extended project duration. Without an organized change order process, these extra costs can quickly spiral out of control. Formal change orders allow costs to be accurately estimated and approved or denied by the proper stakeholders before extra work is carried out. This prevents scope creep and runaway spending.
Maintaining the Schedule
Project changes can delay certain tasks or push back the entire project schedule. Change orders allow the impact on the schedule to be assessed. The schedule can then be adjusted and re-baselined if necessary. This maintains a realistic schedule that all parties can use for planning and tracking progress.
Ensuring QualityWork
Any changes to the original project scope can potentially impact the quality of the work. Change orders permit the conditions and specifications of the modified work to be clearly defined. This reduces the risk of quality issues arising from scope changes.
Legal Protection
For public construction projects, change orders create a legal record of changes to the contract scope and pricing. This protects the client if contractors request additional payments without proper documentation and approval through change orders. It also protects contractors from doing extra work without assurance of proper compensation.
Better Communication
The change order process requires input and agreement from the key project stakeholders before changes are implemented. This facilitates communication about potential impacts to the work, time, and cost. Good communication and documentation helps avoid disputes.
Win-Win Negotiation
Change orders allow win-win solutions to be negotiated if changes are required. This is better than unstructured bargaining that typically arises when changes are addressed informally. Formal change orders keep the discussion focused on finding a mutually acceptable outcome.
In summary, proper change order management brings control, visibility, legal protection, and win-win solutions when inevitable changes arise in a construction project. Following clear change order procedures and processes is one of the most important things an effective construction project manager can do to keep the work on-track and minimize stress between project stakeholders. By taking the time to manage changes via deliberate change order processing, construction projects can meet their targets and be successfully delivered despite needing some modifications along the way.