Minimising Delays & Costs with Change Orders in Construction

In this article, we'll explore practical advice for construction project managers to proactively plan, implement effective change management processes, and maintain open communication with stakeholders, keeping projects on track.

Understanding the Impact of Change Orders

Before diving into solutions, it's essential to grasp the concept of change orders and their impact on construction projects.

Change orders are modifications to the original construction plans, which may arise due to unforeseen circumstances, design changes, scope adjustments and compliance reasons.

They are a common occurrence in construction projects, but when poorly managed, can lead to significant issues for the programme of works.

A. Common Causes of Change Orders

Change orders can stem from various sources, such as:

1. Design changes: Modifications to the original design may be required due to client requests, regulatory compliance, or constructability issues.
2. Unforeseen site conditions: Discoveries like contaminated soil, hidden utilities, or poor soil quality may necessitate changes to the construction plan.
3. Scope adjustments: Expansions or reductions in the project scope may result from client requests or budget constraints.
4. Errors or omissions: Mistakes in the original design documents may need correction through change orders.

B. Consequences of Poorly Managed Change Orders

The repercussions of inadequately managed change orders can be far-reaching, affecting various aspects of the programme of works:

1. Schedule delays: When changes are not handled efficiently, the project timeline can suffer, leading to missed deadlines and potential penalties.
2. Cost overruns: Unanticipated changes often result in additional expenses, which can strain the project budget and erode profit margins.
3. Quality issues: Hastily implemented change orders may compromise the quality of construction work, leading to potential rework or long-term maintenance issues.
4. Stakeholder dissatisfaction: Delays, increased costs, and quality concerns can harm relationships with clients, contractors, and other project stakeholders.

Proactive Planning for Change Orders

Proactively planning for potential changes can make a significant difference in minimising the impact of change orders on your programme of works. The following methods can help identify and mitigate risks related to change orders:

A) Incorporate Contingency Plans

Allocating resources for potential changes, such as a contingency budget and buffer time in the project schedule, can help absorb the impact of change orders.

This proactive approach allows project managers to address changes without severely affecting the project's overall budget and timeline.

B) Conduct Thorough Site Assessments

Performing comprehensive site assessments before starting construction can help identify potential issues that may necessitate change orders.

This information enables project managers to address these issues during the planning phase, reducing the likelihood of disruptive changes during construction.

C) Develop Realistic Project Schedules

Establishing a realistic project schedule that considers potential risks, uncertainties, and change orders can better equip project managers to handle change orders.

This approach involves breaking down tasks into manageable components, incorporating buffer time, and regularly reviewing and updating the schedule as needed.

"Establish a well-defined change order process that includes a thorough assessment of the impact on the project's schedule, budget, and scope," says Andrew Poradzisz, CCO of Archdesk and ex-construction business owner.

"This well-defined process enables project managers to proactively plan for change orders and address them effectively when they arise".

Effective Change Management Processes

To reduce the impact of change orders on your programme of works, implementing effective change management processes is crucial.

A streamlined process allows project managers to evaluate, approve, and execute change orders efficiently, minimising delays and costs.

A) Establish a Change Order Process

A clear and well-defined change order process helps ensure changes are assessed and implemented systematically.

Key elements of an effective change order process include:

1. Identifying and documenting the change
2. Evaluating the impact on schedule, budget, and scope
3. Obtaining necessary approvals from stakeholders
4. Implementing the change and updating relevant documentation
5. Communicating the change to all parties involved

"Clearly communicate the potential consequences of change orders to stakeholders, ensuring that all parties understand the implications before decisions are made," advises Andrew Poradzisz.

By doing so, project managers can ensure that stakeholders make informed decisions and avoid surprises down the line.

B) Monitor and Control Changes

Continuously monitoring and controlling changes throughout the project lifecycle helps project managers identify and address issues promptly.

This approach involves:

1. Tracking the progress of approved change orders
2. Identifying trends and patterns in change orders
3. Addressing potential bottlenecks or issues during implementation
4. Analysing the impact of change orders on overall project performance

C) Encourage Collaboration

Promoting a collaborative environment encourages open communication between team members and stakeholders, enabling them to address change orders more effectively. Some strategies to foster collaboration include:

1. Involving all relevant parties in the change order process
2. Encouraging open and transparent communication
3. Holding regular progress meetings to discuss project status and changes
4. Providing opportunities for feedback and continuous improvement

D) Maintaining Open Communication with Stakeholders

Clear and open communication with all project stakeholders is essential in managing change orders effectively.

By keeping stakeholders informed and involved throughout the project, project managers can ensure smoother implementation of change orders and reduce the negative impact on the programme of works.

A) Develop a communication plan

A robust communication plan establishes channels, frequency, and content for project updates, ensuring all stakeholders remain informed about project progress and changes.

Key components of a successful communication plan include:

1. Identifying stakeholders and their communication needs
2. Defining communication channels and formats
3. Establishing a schedule for regular updates and meetings
4. Assigning responsibility for communication tasks

B) Communicate Change Orders Proactively

Proactively communicating change orders to stakeholders helps manage expectations and reduce potential conflicts. This approach involves:

1. Informing stakeholders of the potential impact of change orders on schedule, budget, and scope
2. Providing updates on the progress of change order implementation
3. Addressing stakeholder concerns and questions in a timely manner

C) Leverage Technology for Effective Communication

Utilising technology can streamline communication, ensuring stakeholders have access to up-to-date information and facilitating informed decision-making.

Project management software, communication tools, and mobile applications can all aid in maintaining open communication with stakeholders, improving overall project outcomes.

Use Technology for Change Order Management

Embracing technology is essential for construction project managers seeking to minimise the impact of change orders on their programme of works.

"Leverage technology to track and manage change orders, providing visibility into their impact on the overall programme of works and facilitating informed decision-making," suggests Andrew Poradzisz.

Technology can not only streamline the change order process but also improve communication, collaboration, and decision-making.

A) Project Management Software

Project management software is a valuable tool in managing change orders effectively. Many software solutions offer specific features for change order management, including:

1. Centralised repositories for project documentation and change order records
2. Automated workflows for change order approval and implementation
3. Real-time updates on project progress and the impact of change orders
4. Reporting and analytics capabilities to monitor change order trends

B) Collaboration and Communication Tools

In addition to project management software, collaboration and communication tools can play a significant role in handling change orders efficiently. These tools facilitate real-time communication between project stakeholders and can include:

1. Instant messaging platforms for team communication
2. Video conferencing tools for virtual meetings and progress updates
3. File-sharing solutions for easy access to project documents and plans
4. Task management apps to track change order implementation

C) Building Information Modelling (BIM)

Building Information Modelling (BIM) is a digital representation of a construction project's physical and functional characteristics.

By incorporating change orders directly into the BIM model, project managers can visualise the impact on the programme of works and make informed decisions.

Benefits of using BIM for change order management include:

1. Improved understanding of the change's impact on project design and schedule
2. Enhanced collaboration between project stakeholders
3. Reduction in errors and rework due to updated and accurate project documentation
4. Streamlined decision-making process, as changes are clearly visible in the model

By utilising technology in managing change orders, project managers can gain better insights and control over their projects, minimising delays and costs.

Minimise the Impact of Change Orders on Your Business

Change orders are an inevitable aspect of construction projects, often leading to delays and cost overruns.

To minimise the negative effects of change orders on your programme of works, it's essential to take a proactive approach, implement effective change management processes, and maintain open communication with stakeholders.

If you want to find out how Archdesk can help you minimise the impact of change orders, get in touch today.