Project Management: Change Orders

  • 11 February, 2020

One of the most frustrating parts of a construction project can be change orders. They have given a building project a bad reputation but oftentimes, they are inevitable. Things change. This can be due to field conditions and uncovering something unexpected, or it can be due to a design change per to a client or the architect. Rather than not accept any changes whatsoever (which is, more often than not, unrealistic), changes are accounted for and built into the process. In architects' contracts, contingencies are often included to cover design changes should they arise. Contingencies may also be included in construction contracts to cover construction costs associated with changes. In documentation, changes are handled using three different methods to formally change the contract for construction/contract documents:

1.An architect's supplemental instruction (ASI)
2.(Formal) change orders
3.Construction change directive

Any change will have a connection to cost, schedule, and scope.

If there is no change in cost, schedule, or scope, then an ASI is issued (AIA document G710-2017 or a version thereof). It is only to be used for minor changes and oftentimes serves to provide clarification.

If there is a change in cost, schedule, or scope, a change can be handled in two ways: through a formal change order or a construction change directive. Despite being treated as two separate entities, they are essentially two different ways of getting to the same place-authorizing a change through a formal change order. To clarify that point, the end goal is to have the change approved and work performed and compensated. A formal change order (AIA document G701-2017) is straightforward. It lists the change in scope and the time and/or costs associated with the change. It is an agreement between the owner, architect, and contractor that is signed by all parties. When it has been signed, the work is done and compensated to cover the extra costs (and may be covered by the contingencies added to contracts).

However, sometimes this process does not run so smoothly. Sometimes a contractor may issue a change order for approval, but the owner does not agree with the cost or time. Any disagreement could delay the project further. The contractor could be liable for any change in schedule or projection completion could be delayed. This is the role of the construction change directive (G714-2017), which directs the changes to be made while the terms (cost and time) are being hammered out. This is an efficient way of performing the work and keeping the project on schedule, even in a time of conflict and discord. It is recommended that the construction change directive, when approved, is superseded by a formal change order, which is why they are two ways of getting to the ultimate goal: an approved change order.

These documents not only track the changes in the work (possibly with an accompanying log) but are the three ways to formally change the contract for construction.

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