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Change the Way you Think about Change Orders

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There is a misconception that contractors make all their money off of change orders. Let’s set the record straight: nobody likes change orders. While there are certainly cases where a contractor’s profitability on a project may have increased from change orders, I would bet that the people behind the process did not enjoy it.

Change orders are a distraction. When a change order comes up that alters work currently taking place or about to take place, that means that those affected need to stop what they’re doing and come up with a new plan. If it only happens a couple of times, it’s probably not a big deal, but as the quantity of change orders increase, this constant switching and re-planning can become a real productivity loss.

While the quantity and scope of change orders can certainly be reduced with proper design and planning, any decent-sized project will have them. Planning for this eventuality upfront and having the proper systems and procedures in place is crucial for setting everyone up for success.

Centralize communication and keep everyone in the loop. 

I have seen (and been responsible for) numerous occasions where scope changes were only sent out to a select few contractors because the team thought they were the only ones affected. The work was priced, approved, and proceeded upon in the field. Shortly thereafter a subcontractor would run into the office in a frenzy and say, “When did this change happen? Why wasn’t I included? Don’t you realize that this changes my scope?” Construction projects are complex and the trades are very interrelated. Experienced builders and project managers learn all of the dependencies over time, but even the most experienced can still miss something. With that in mind, why aren’t all trade teams looped into changes when they happen? The answer is two-fold. One, general contractors are concerned about inundating their subcontractors with too much information, and two, it becomes very time consuming to follow up and track down all of those pricing requests.

We understand that, and so we developed easy-to-use processes to distribute scope changes and pricing requests along with automated tracking to ensure change requests are not only distributed, but responses are collected and reminders are sent. With instant notification anywhere your team works, they can log in to the system and quickly see the status of every item they have been asked to review. Teams don’t need to create side spreadsheets and rummage through emails trying to figure out who has responded and who hasn’t. With Procore, you can easily send out Requests for Quotes (RFQs) to all of your contractors and track the status of all RFQs across all Change Events.

If it’s not written down, it doesn’t exist.

With change order management, it’s important to track all potential changes in a single location and establish a chain of command. Take the example of the architect or owner walking the job site, seeing something they want changed, and going over to discuss it with the trade foreman. With good intentions all around, the trade foreman may go perform that work and then submit a price for it to the general contractor. The general contractor then disputes it, or maybe takes it to the owner who says, “What? It costs that much? I didn’t realize he was just going to go do it. I wouldn’t have authorized this if I knew the price.” The trade foreman took direction from someone he shouldn’t have, and he proceeded without written authorization to do so. This is partly a training issue, and partly a systems issue.

To help combat these issues, we built a mobile solution so teams can access the important information in the field, when they need it, how they need it. With Procore’s mobile solution, teams can:

  • Create change events from the field (no more notepads that never make it to the office)

  • View the status of change orders such as whether authorization has been given

  • Access all project documentation such as drawings, RFIs, submittals, and meetings

The longer a potential change order stays “potential,” the more risk you encounter.

A change order might cost $10,000 today, but in two weeks, it may turn into a $15,000 issue along with a greater schedule impact due to additional rework.

Staying on top of Excel tracking logs takes a lot of time and there is always a high risk of error. Using these logs as a tool to send out reminders to all parties is time consuming and requires painstaking accuracy. While project managers are meticulous organizers, their energy could be more usefully focused elsewhere.

That’s why we take the pain out of creating and updating change order logs and help project managers enforce a reasonable response time from all parties. With Procore’s change management tool, teams are able to:

  • Send change orders through the system and automate reminder emails

  • Reduce turnaround time by providing public accountability to all parties

  • Access change order documents from anywhere

At Procore we have a vision of making construction project management effortless. Procore’s platform is widely known for its modern interface, power, and ease of use. Make your teams happier and more efficient by giving them a single place to collaboratively manage all aspects of a project from RFIs and submittals to budgets and change orders.

Already a Procore user? Learn more about Change Management here.

If you liked this article, here are a few eBookswebinars, and case studies you may enjoy:

Manual Invoicing vs Automated Invoicing

The Speed of Innovation & Mastering the Art of Change

BBE Study


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