Change Orders

A good set of plans and specifications will keep change orders to a minimum. Using a 'no surprise rule' is essential:

  • A formula for any additional work must be included in the base contract. This formula must include hourly and markup rates for any unanticipated work.
  • Any anticipated changes must be identified by all the parties as soon as they are discovered.
  • All change orders must be in writing and signed by the owner and the contractor before the work is done.
  • Some unanticipated work may have to be done on a "time and materials" basis, e.g. repair of hidden defects. Even then, it must comply with the formula in the base contract, and should include a "not to exceed" price limit. Take time to review any change order and, if necessary, bring in an outside expert to determine the validity of the price and the necessity for the change order.

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Managing the change order process the number, content and cost is one key to keeping the project within the limits of your budget.