What Does a Contractor Do When the Owner Makes a Change in Construction?

Understanding the role of a contractor when the owner requests a change in construction is crucial for a successful project. This article aims to provide a comprehensive overview of what a contractor does in such situations, highlighting the positive aspects and benefits of their involvement. Whether you are an owner seeking guidance or a contractor looking for clarity, this information will prove valuable.

I. Importance of a Contractor's Role:

  1. Ensures smooth project execution:

    • Contractors act as a bridge between the owner and construction team, facilitating effective communication and collaboration.
    • Their expertise helps maintain project timelines and quality standards even when changes occur.
  2. Manages cost implications:

    • Contractors thoroughly assess the proposed change to determine its impact on the project budget.
    • They provide cost estimates, alternative solutions, and negotiate with suppliers to minimize additional expenses.
  3. Implements necessary modifications:

    • Contractors coordinate with architects, engineers, and subcontractors to revise plans and specifications.
    • They oversee the execution of changes, ensuring compliance with building codes and regulations.

II. Benefits of Contractor Involvement:

  1. Expertise and Experience:

    • Contractors possess extensive knowledge of construction processes, materials, and techniques.
Mastering the Change Order Process in Construction

  1. Start With the Contract.
  2. Review Plans and Specifications.
  3. Don't Ignore or Delay Change Orders.
  4. Communicate With All Parties Involved.
  5. Negotiating the Change Order.
  6. Document Everything.

What is an example of a change order in construction?

In general, there are two types of change orders in construction: additive and deductive. When it comes to additive change orders, it usually means expanding and adding new elements to the project scope. For example, creating a new wall in a previously open-plan space.


What is the first proper step for a change order on a project?

Regardless of who initiates a potential change, the first step is for the project owner and contractor to discuss what the change is, why it's being requested and how it will impact the project's cost and timeline.

How is change order used in construction estimation?

Change orders are revisions or additions to an existing construction or engineering contract and are used to modify the original agreement of the parties. Typically change orders are used to adjust scope, price, and/or schedule after the contract is executed.


What are the 2 types of change orders?

Generally, there are four types of change orders. These are Time and Material, Lump Sum, Zero Cost, and Unitary Cost change orders. A lump sum change order is used when the defined change in the work scope is quantifiable, and a definite price developed.

What is the owner accountable for on a construction project?

The owner usually warrants the adequacy of the plans and specifications on many projects and, therefore, bears the responsibility for any defects or deficiencies in them. Such defects can exist in many forms, but tend to fall into the two categories: product and time.

What is an owner change order?

As Construction Law Today explains, “a Change Order is a bilateral agreement between parties to the contract–an owner and prime contractor, prime contractor and subcontractor, two or more subcontractors–to change the contract.

Frequently Asked Questions

What is ownership accountability responsibility?

Taking ownership tells others — “You can trust me to do the right thing”. Being accountable is about being responsible for the result. Ownership is about initiative, accountability is about follow-through.

What triggers a change order?

Common causes of change orders include: ‌The customer requesting adjustments to the project, such as new features or changes to existing elements. ‌Correcting an inaccurate estimate of the project's work or scope, such as an overestimate of time to completion.

What is the average amount of change orders in construction?

You can calculate those costs using either a forward or backward approach (described in detail below). Research studies have found that, on major projects, the change order costs typically amount to 10 to 15 percent of the contract value.

FAQ

What is an approved change order?

A Change Order represents the mutual consensus between the parties on a change to the work, the price, the schedule, or some other term of the contract.” As such, a change order must be written out and approved by all parties, which can take time, money, and patience to complete.

How do you handle change orders in construction?
A Quick Guide to Managing Change Orders in Construction

  1. Get Clarity on Scope of Work.
  2. Review the Construction Contract.
  3. Get Written Approval for All Change Orders.
  4. Communicate With Stakeholders.
  5. Understand the Impact of Change Orders.
  6. Final Thoughts on Change Orders.

What does a contractor do when owner makes a change in construction

What's the difference between change order and change directive?

With change orders, either party will present the other with a proposed change, and then both the owner and the contractor will agree on how to make that change, as well as other adjustments to the price and the schedule. Change directives aren't an agreement or a request to make a change — they're mandatory.

What requires a change order?

Whether initiated by the client or by the contractor, anything that alters the original contracted scope of work, costs or project timeline requires a signed change order that captures these modifications.

  • What is the change order clause in construction contract?
    • What is a change order? A change order is a written amendment to an existing contract after the effective date that alters the work, the contract sum, or the contract time. While contracts are intended to be the final word for projects, sometimes things need to change.

  • How do you complete a change order?
    • 6 things every change order should include
      1. Project and contact information.
      2. Dates of the change.
      3. Details of the work.
      4. Updated schedule.
      5. Cost of the change.
      6. Updated contract value.
      7. Match the payment application.
      8. Get it in writing — and save it.

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