The contract is written for a purpose and is to guide the project team in carrying out the project. Contracts must define the plan, design, specifications, quality standards, budget, authorized personnel, schedule, results, order status and scope of work. The customer will complain and demand that the original agreement be executed. Tackling change orders requires a flexible approach to construction projects. However, this requires contractors to take control of various project modules, such as programming and budgeting.
Managing customer expectations in a residential construction project is critical to your success. Make sure to explain the change order process to your customer before starting the project by including verbiage in your standard housing contract that indicates how the changes will be handled. In this way, customers will understand from the outset that changes can affect the budget and timeline and therefore require written approval. Unexpected changes during a construction project can quickly derail the project and cause high stress in the workplace.
That is why it is so important to hire a renowned contractor and verify references. When such agreements are settled before the start of a construction project, change orders simply become another part of the standard project costs. A solution for changing order management is Procore software review essential to overcome the negative effects of change orders on the job site. By making effective use of the exchange order process, owners can maximize the value of their projects by taking advantage of the opportunities that have developed after construction has started.
Our previous advice shows that coordination and communication are essential to avoid change orders. Be more careful when assessing documents before construction so you can write a better plan, build schedule and budget. And finally, act quickly for problems so that they don’t become bigger and more expensive mistakes. Under this exchange order, an owner and a general contractor agree to a certain change in scope and record the details in the exchange order document. The construction change order represents a change to the original contract, which defines the scope of the project work and refers to the plans, drawings and specifications. Changes to contractual agreements may be required at any time during the life of a construction project.
There is an explosion of technology solutions and applications for the construction industry and project management software with exchange order functionality can be one of the smartest investments a contractor can make. Current systems offer change order templates and options to track your approvals, making the process less cumbersome and efficient than paper records and email. Data from the sector shows that exchange contracts represent 8% to 14% of capital construction projects. A study indicated that they led to project costs being exceeded from an average of 11% to 15%, while increasing work to 20% after planned completion dates. It can be disagreements between project owners and contractors or subcontractors due to design-related confusion. This can even involve last minute changes that occur due to inconsistent documents.