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| Construction change order templates free download |
All construction projects are subject to change. Once you're at work, the project scope and site conditions often differ from what you expected when signing the contract. Sometimes the project owner asks you to do more or less.
Other times, you realize that the site conditions will not allow you to finish work at the price you agreed to. Anytime a change in scope of work occurs in your contract, you will need to complete the change order - and get the signature of the project owner on it.
What is the change order?
A change order is a document that explains changes in the scope of construction, design, site conditions, or even the project schedule. In many cases, the construction contract dictates the change order process. The contract should provide specific instructions on how to manage and process the change order. Change orders will not only change the project scope and schedule, but can also affect your responsibility and jeopardize your payment.
When negotiating a construction contract, it is often difficult for parties to determine the exact scope of work to be performed. These types of agreements are often changed during project performance. This is accomplished through a process commonly referred to as "a change order."
A change order is defined as the employment, services, or materials required by the owner that are added or removed from the employment, services, or materials covered by a previous contract between the same parties. In general, owners do not like change orders because they can increase the cost of the project.
On the other hand, contractors generally enjoy change orders because they increase the cost of the project but sometimes they mint the extra time it will now take to complete the project. Often times, their owners and contractors will be involved in a dispute over a dispute over change orders.
5 major components of a change order in construction contracts:
- Change in the original scope of work
- Change in contract value
- Change in time
- Signatures of both parties
- Date of the change
Negotiate a change order
The last step in the process of arranging change before starting a new business is negotiating a change order. This can be a difficult process because disputes can arise over whether there is an actual change in the contract scope. There could also be issues about a cost agreement and whether to add extensions to the original timeline.
The first thing you need to do is work with the owner to determine how to estimate overtime and agree on the cost. This can be done through unit pricing, time and material pricing, or as a total cost. This may be already indicated in the contract documents or you may need to work with the owner to find a mutually acceptable solution.
The next thing that you need to work on is whether there is a need to extend the timeline as a result of arranging the change or not. Do not be afraid to undo, especially regarding change orders initiated by the owner, if additional work required will require additional time to complete beyond the deadline specified in the original contract.
Another example is a clause that includes a text contract stating that licensing overtime must be in writing and signed by both parties. Or that the contractor is not required to continue the work until an agreement is reached on the scope, price and overtime; Also, be sure to include the identity of persons who are authorized to agree to change orders on behalf of both parties.
The point is that a well-crafted construction contract must have tools in place where these issues can be negotiated and somewhat solved simply while working on the project's total returns.
Common reasons for issuing change orders
There are a variety of conditions that may require regime change. Some of these include:
- Inaccurate estimates of work or project costs Poor planning of the original contract
- Incompetent team unable to complete deliveries in time / budget
- Design changes, such as additional features, that are requested after work begins
- Unspecified project scope requires the contractor to add work to meet customer needs
- Weather conditions that cause delays or damage
- Errors or omissions in specifications or drawings (for example, lack of details or inaccurate representations of the environment or different products required in specifications versus drawings)
- Unexpected site conditions (for example, soil problems require additional work or different equipment)
- Replacement of items (due to lack of availability or late shipments) that lead to costs or shortages
- Mistaken interpretations between the general contractor and the subcontractor regarding work that falls within the scope of the project
- Waiver of the contract that cancels the change orders and leads to disputes between the owner, the contractor and / or the subcontractors
- Accelerate the owner for the project schedule
- Contractors / subcontractors in the field take incorrect oral instructions from the supervisor / general contractor
- Subcontractors bid on purpose at a lower price, relying on change orders to provide profit once work begins
- Equipment malfunctions, causing delay or interruption.
Best practices for building change orders
Although each project is different, here are some general best practices that you can follow when creating and issuing building change orders:
- Use construction project management software, take-off and rating programs, or building information modeling (BIM) tools to automate and simplify the change order creation process and management process.
- Organizing stakeholder meetings at the beginning, end and throughout the life of the project with the owner / client, the general contractor and the subcontractors to ensure that everyone is aware of the scheduled work.
- Conducting peer reviews and / or third parties for drawings, specifications, and other important documents to ensure that nothing is missing or incorrect.
- Create and use checklists for materials that need to be included in drawings, specifications and contracts.
- Attending workshops and training in document quality and development, so that everyone knows what processes to follow and what information to include.
- Ensure that all programs and systems are regularly updated - especially those used to create and manage change orders and contracts.
- Communicate with all stakeholders to request written changes before undertaking any physical work.
- Be as specific as possible when requesting a new job. Include drawings / specifications, describe changes in detail, provide updated cost estimates and payment terms, and include new deadlines for completion of work and project.
- Open change orders are not accepted without setting a deadline or fixed amount limit.
- Ensure that subcontractors provide clear hourly accounting and cost of materials and quantities for any additional work. If possible, ask them to provide pictures and video of their work along the way.
Here are some example work order samples that you can download:
- An order to change the scope of work
- An order to change a sub-contractor
- Project change request form
- An order to change the contract
- An engineering change order
- Construction order change
- Building Registration Change Form (MLM Excel)
- An order to change the facility layout
- Requesting additional work
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