How to ensure your change orders are reasonably priced

Change orders are an often unavoidable part of a construction project. Accounting for an average of approximately 8-14% of all capital construction dollars, they can contribute a sizeable amount to a project’s price tag when all is said and done.

Reasons for change orders can include unexpected site conditions, changes or errors in project designs, or an owner’s decision to change specific products, equipment or finishes. When changes come up, facility managers and contractors can get uneasy as they are now dealing with work outside of the scope of the contract. Without firm guidelines for how to price change orders, negotiations can take a lot of time and effort. No facility manager is excited to hear that their project is suddenly going to be costing them more than they thought. Their goal is to keep change order costs low while still remaining on schedule. Due to pressure on facility managers to avoid delays, contractors typically have an upper hand in negotiating prices. In the contractors’ defense, they want to make sure that they are getting paid fairly for the changes. They have to negotiate credits and extras with subcontractors and suppliers.

One solution to pricing change order issues is to have preset unit prices included in the contract documents to cover any possible deletion, change or extra.  Not only does this eliminate pricing disputes, but it also saves time and administrative burden and allows the parties to spend their time completing the project on schedule. This system is a way to simplify the entire change order process and give owners, as well as contractors, peace of mind that changes are priced fairly. The Gordian Change Order Management System™ (COMS) relies on the precise and detailed data available from the Construction Task Catalog® to provide this type of solution.