The power of a Change Order…It’s a double edged sword.

I am over simplifying this a bit so it’s a shorter read but you will see my point…So the slab is poured, forms stripped and layout is ready to begin, then comes the call from the field, the layout point as referenced on the drwgs are not working out and they spent half a day trying to figure it out. Standard operating procedure, fire off an RFI to the Owners rep asking for clarification and direction, three days later (the contract call for 5 days response time) a response comes in, you cc’d all parties and get it out to the field asap. A half a day later the field calls again and says this response does not work; again 3 workers have spent a half a day re-working on layout. Again, standard operating procedure, send out another RFI and this time include a request for change order due to extra hours spent on trying to resolve this issue. And again 3 days later a response comes back from the owners Rep and this time it actually works!! Glory be!! And the best news is without so much of a hint of a fight they approve your change order for a total of 18 hours of additional labor and even pay it on the next progress billing. Life is good right? OK, let’s fast forward to when the project is 80% complete, you just did a schedule update and its showing you are a little over one week late on hitting your completion date. The owner asks why? You dig back thru paperwork and tell them well, remember the layout issue? We waited a total of 6 days for a response, it took us two days to regroup and move forward….. so see…. its simple why we are behind.

Owner says …oh no no no…, we responded in a reasonable time, we paid your requested change order and nowhere in the RFI or the CO did it state it was going to put you behind schedule a week. We just assumed you were accelerating and this covered your costs. We will be charging you the $500.00 per day in LD’s if you do not finish in time. So…quite honestly your hosed!!! It’s going to cost you more than the let’s say the $4,000 in LD’s to fight it. But hey you got a CO for $810.00 dollars….yippee kay ya!!

So a change order is a double edged sword, you need to look down the road and “forecast” these types of issues. Had this type of forecasting been done, a comment on the RFI and Change Order would have been made notifying the owner that potential delays to the overall schedule may occur. A new task would have been placed in the schedule that was attached to the framing completion date. Some people would call this playing the “paperwork game” and say it’s not politically correct any more. What’s not politically correct EVER is losing $3,190 on a legitimate issue.

You can help by putting systems in place. Make a company procedure of checks for RFI and Changes Orders that get followed every time. Many software packages for Construction help you do this. Provide a company training where you show numbers of dollars actually lost and how to properly document issues. Explain to the owners Rep what you are doing and why, this will alleviate any hard feelings up front in case they think you are just papering the walls on them. Like SRCS has said many times, do the work up front, it’s much easier and less expensive than cleaning up on the back end. Call us we can help, 503-668-7277. www.sandy-river.com