In today’s economy, construction budgets for projects of all types are tight. More than ever, the Encore Construction team hears owners expressing their concerns regarding change orders and cost overruns. Read on to learn more about change orders, how and why changes occur, and some ways to manage or even eliminate them altogether.
What is a Change Order?
A change order is defined as a change in the original scope of work as previously agreed to by the project’s owner, general contractor, and architect. Therefore, a change order is work that is added to the original scope of a contract that alters the original contract amount or completion date. Due to the complexity of the typical design and construction process, change orders are often necessary.
Why Do Change Orders Occur?
Change orders occur as the result of problems discovered after the original contract has been executed. Common causes for change orders are:
- Municipal or code-compliance issues.
- An owner needs (i.e. to add a piece of equipment that has become necessary for the project.)
- Correct an error that occurred in the original design or engineering.
- Other features or options that are requested by the owner.
To understand more completely why changes occur it’s important to understand all the players involved. From the original concept to completion of the project’s design, a typical restaurant project includes the owner, designer, kitchen consultant, architect, and engineer. Add in equipment, furniture, and other vendors, municipalities and utility companies and it’s easy to see there are many moving parts. And we haven’t even added the general contractor or started the construction process yet!
Consider the entirety of a project as an investment. The investment has a certain cost. This becomes the real cost. If a change order becomes necessary, then the initial contract amount was never the real cost, to begin with.
So How Can You Eliminate Change Orders?
You can eliminate some change orders and you can manage their impact. Consider putting your team together early in the process and make sure a general contractor is part of that team.
When assembling your team, it’s in your best interest to work with individuals that have the credentials and challenge each other because of having successfully worked together before. Right behind the architect and engineers, general contractors understand constructability and code compliance better than anyone. And there’s no one more qualified to deliver pricing, so why wouldn’t you want them on your team from the very beginning? This insight and teamwork will facilitate the process and help to reduce or even eliminate those dreaded and budget-busting change orders.
Work With Encore Construction
As a premier commercial general contractor, Encore Construction is proud to provide interior and exterior services in Baltimore, Maryland and beyond. We have an impeccable track record, an impressive portfolio, and an experienced team that is ready to tackle your next big project. Our results speak for themselves, and we’re proud of the work we continue to produce for our clients.
We have offices in Annapolis, MD and Ocean City, MD and we are happy to serve the Washington, DC, Baltimore, Northern, VA, Eastern Shore, MD and surrounding areas. Follow us on Facebook, Twitter, G+, and LinkedIn for news and updates! Do you want to discuss your project with a member of our team? Visit our website, and call us at (410) 573-5050. We look forward to hearing from you!