Time is Money. In the context of a new or remodeling project, a Change Order can mean a lot of time AND money.
Indecision and inadequate construction documents are two of the biggest contributors to Change Orders. A Change Order is a document that is issued after construction has begun, usually by the contractor, that modifies the original construction contract to adjust construction costs related to a change in design. The cost associated with a Change Order is calculated separately, typically at a higher rate than the original contract.
Our Top 2 Ways to Help Reduce Change Orders:
#1 Make Decisions in a Timely Manner
Decisions, decisions. You started a project, but now you’re receiving a lot of requests from the Architect and/or Contractor, requesting a decision. You’re presented with a myriad of options: the amount of information can feel overwhelming. But a decision needs to be made, and only you, as the Owner, have the authority to decide. As an Owner, there is a responsibility to respond in a timely manner to ensure that your project continues to move along smoothly in the design and construction timelines. The longer a decision isn’t made, the more cost and time can be incurred, as a result in change of scheduling of contractor and sub-contractors, availability of materials, and the Architect’s schedule.
#2 Avoid “Allowances”
If a specific item (Appliances, tile, equipment, furniture, etc.) is not specified in the construction drawings at the time when the project is being estimated, the Architect may specify and the Contractor may indicate a budgetary allowance in the contract. This amount is not a guarantee of cost. It is a placeholder to provide all parties (Owner, Architect, Contractor) with an approximate idea of cost for the item. Allowances are typically based upon the quality and type of material being used on the overall project. If the project is a high-end custom project, the allowance would be provided accordingly to reflect the overall quality of the project. Reducing the number of allowances by specifying all of your materials, finishes, accessories, faucets, etc. early on will reduce the number of changes to the contract amount later on due to change orders.
While you may plan and specify a seemingly endless list of items during the construction documents phase, there are circumstances that are beyond anyone’s control that will necessitate a Change Order. The intention is to help reduce the number of Change Orders issued later on, thereby reducing the overall cost and time for construction.