What Are Change Orders?
Change orders are an important part of the project management process, but what are they exactly? In this blog post, we will be discussing what change orders are and how they differ from contracts. We’ll also discuss why it’s important to have a clear understanding of how change orders work and when they should be applied. By the end, you will have a better understanding of how change orders can benefit your business.
What is a change order?
A change order is a contract amendment that documents an agreement between a contractor and a client to add, delete, or modify work on a construction project. Change orders typically arise when the client requests a change to the scope of work defined in the original contract. Change orders may also be initiated by the contractor, for example when unforeseen conditions are encountered during construction.
The key elements of a change order include:
-A description of the proposed change
-The impact of the proposed change on the project schedule
-The impact of the proposed change on the project budget
-Any other relevant information about the proposed change
Once both parties have signed off on a change order, it becomes a binding amendment to the original contract.
Why do change orders happen?
There are a number of reasons why change orders happen on construction projects. The most common reason is that the original scope of work was not accurately documented or understood. As the project progresses, it becomes clear that additional work is required in order to complete the project as originally envisioned.
Other reasons for change orders include changes in the project schedule, unforeseen site conditions, material availability issues, and changes in the design or specifications. In some cases, change orders are requested by the client in order to make changes or additions to the project.
Change orders can be time-consuming and costly, but they are often necessary in order to ensure that the final product meets the client’s expectations.
How to manage change orders
A change order is a written agreement between a contractor and a homeowner that documents changes to the scope of work in a home improvement project. Change orders typically arise when the homeowner requests a change to the original plans or when unforeseen circumstances require a change to the original scope of work.
Change orders can be small, such as adding an outlet to an existing electrical circuit, or large, such as adding an entirely new room to the house. Regardless of size, all change orders should be in writing and should be signed by both the contractor and the homeowner. The document should also include a description of the change, the cost of the change, and any impact on the schedule.
Once a change order is approved, it becomes part of the contract between the homeowner and contractor. As such, it is important to carefully review all change orders before signing them. Homeowners should make sure they understand what they are agreeing to and contractors should make sure they are being compensated fairly for the work.
Conclusion
Change orders are a vital tool for managing construction projects. They provide clear communication between project stakeholders and can help keep projects on time and within budget. Change orders also protect the contractor from having to bear the cost of additional work that was not mutually agreed upon at the beginning of the contract. With careful management, change orders can help ensure secure transactions and successful completion of your next construction project.