It’s been said that the “best-laid plans of mice and men often go awry.” In other words, even the most meticulously put-together plans sometimes need an audible. Anyone who’s been involved in a construction project before understands exactly how that adage plays out during the process. Sometimes, the most drastic changes lead to what’s called a “change order.”
A change order is something that owners generally despise and contractors generally favor. Why? Because a change order is a formal amendment to the original construction contract that often adds time—and money—to the project. It occasionally decreases the labor, services, or materials ordered in the original contract, but that is not the norm.
Project owners and developers do not enter into a change order lightly; more often than not, they will try to convince contractors and subcontractors to informally add the changes to the project scope. Other times, owners or developers will try to make the case that the “change” was actually included in the scope of work all along. Contractors, for their part, might argue that they never agreed to a specific price in the original contract.
Regardless of either side’s argument for or against a change order, these situations often cause such disagreements:
- Unreliable labor (subcontractors that do not show up as scheduled);
- Specifications in the original contract are inaccurate or incomplete;
- Raw materials were either unavailable or delayed in getting to the site;
- Unrealistic timelines and/or cost; and
- Any unforeseeable hurdles (like consistently bad weather).
Ways to Avoid Needing a Change Order
Many times, the disagreement over whether or not a proposed change actually necessitates a change order is more disruptive than the change order itself. If a change order is clearly necessary, then there is little sense delaying the inevitable. Thus, the more productive activity is not to necessarily avoid a change order, but improve the process for deciding on and implementing a change order.
Some ways to improve the change order process include:
- Drafting a “change order directive” that comprehensively lays out the process for implementing a change order in your project;
- Defining the scope of work as clearly as possible;
- Including a right-to-audit clause;
- Choosing optimal data management and communication software; and
- Retaining an attorney at every stage of the change order process.
Yes, that means having an attorney help draft and look over your construction contracts before you sign anything. Change is inevitable, but you can control how you handle it. Contact our firm today for proven construction legal counsel.
