7 Steps of Change Order Resolution from Concept to Close-Out

By Sheree Thomas

Unfortunately, change orders seem to be an inevitable part of construction. That’s why it is crucial to begin the change order resolution process at the conception phase of any project.

For many years, I worked as a project manager for a government agency so I know first-hand how difficult it can be to budget for project changes especially in a time when capital funds are very limited.  A change order on one project can result in postponement or even elimination of another project.

Now, when serving as a Construction Manager, I always try to bring an owner’s perspective to every project and continue to be sensitive to the funding limitations of our clients.  As such, we focus on a proactive process for change order management in an effort to avoid the unexpected:

1. Thorough Document Reviews during Design

We review the documents through the eyes of the contractor, as if we were performing the work.  Engagement during the design process allows us to conduct an independent review of the design documents and provide comments/questions with the purpose of reducing or eliminating change orders during construction. This allows changes to be incorporated into the specifications and drawings prior to starting the bidding process. 

2. Conduct Detailed Scope Review with Apparent Low Bidder

We meet with the apparent low bidder(s) and walk through the construction scope of work to ensure that all major work items were included in the bid and to discuss items requiring further clarification prior to the start of work.  Oftentimes, items can be clarified during this review, eliminating resulting change orders.

3. Establish Change Order Guidelines with the Project Team Upfront

During the pre-construction meeting, SBTA makes it a point to go over the process for requesting and approving change orders.  Through this process, we make it clear that a request for a change order must be made prior to starting the change order work. We also clearly define who has the authority to approve changes.

4. Resolution of Requests for Change Orders:

When a request for a change order is submitted, our first step is to review the request against the contract to ensure the change order work is not already “owned” under the contract.  This simple step often results in elimination or reduction of the change order request and sets the tone for future change order requests.  If a request is found to be valid, we work with the contractor to assure the scope and cost of the work is appropriate and the impact to the project and Owner is minimized to the greatest extent possible. 

5. Change Order Cause Tracking:

We track change orders by three categories: 1) Owner Requested, 2) Error/Omission, and 3) Unforeseen Conditions.  Categorizing change orders is an important step in evaluating the impact and the reason the change orders occurred.  

6. Document Control & Transparency through our Construction Management Platform:

We employ a cloud-based construction management platform to be used by all project participants.  This platform controls the flow of project documentation and automatically tracks RFI and submittal reviews to eliminate change orders resulting from delayed responses.  It also facilitates transparency as pertinent project documentation is available to everyone in a single location that is accessible from any device.  Further, it greatly increases timely and accurate communication to all parties which allows us to proactively address unforeseen changes, resulting in less cost and schedule impact when these situations arise.  Effective planning and communication are key to the success of the project.

7. Lessons Learned:

We are always searching for ways to improve and one of the processes we have instituted is to prepare a Lessons Learned list during each project, which assists us in being proactive on the next job so we can identify the most common pitfalls on all types of construction projects.

Change orders can ruin a project as well as the relationships of all participating players. While they are often unavoidable, proper communication and oversight from concept to close-out can reduce or eliminate change orders and set reasonable expectations for the entire project team.

Sheree Thomas is Founder and President of SB Thomas Associates, a woman owned (WDBE) firm providing next generation Construction Management and Inspection services in the building and transportation industries.

To contact the author, e-mail sheree@sbthomasassociates.com or call 412-264-0970.