Three Easy Ways to Reduce Change Orders on Current and Future Construction Projects

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. revised building codes or advancements in technology, as is the case in hospital construction), many can be circumvented if the team works collaboratively and there is a system in place that provides transparency and facilitates a structured workflow.

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, 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 (e.g. improvements in medical equipment that evolve over a healthcare project’s term).
• Code changes.
• A late-arriving epiphany.

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