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 By implementing effective strategies for managing change orders, construction companies can reduce the risk of costly delays and disputes with clients.
The Impact of Change Orders
Change orders can have a significant impact on the cost and schedule of a construction project. According to a study conducted by the Construction Industry Institute, change orders are responsible for an average cost overrun of 10% in construction projects. These cost overruns can be attributed to a variety of factors, including delays in construction, increased labor and material costs, and disputes with subcontractors.
Strategies for Managing Change Orders
1. Communication is Key
Effective communication is essential for managing change orders in construction projects. Project managers should maintain open lines of communication with all stakeholders, including clients, subcontractors, and suppliers. By keeping everyone informed about potential changes to the project scope, project managers can minimize misunderstandings and prevent costly disputes.
2. Document Everything
Proper documentation is crucial when it comes to managing change orders. Project managers should keep thorough records of all change requests, including the reasons for the change, the impact on the project budget and schedule, and any approvals or authorizations that are required. By documenting every aspect of a change order, project managers can ensure that all parties are on the same page and prevent disputes down the line.
3. Assess the Impact
Before approving a change order, project managers should assess the potential impact on the project budget and schedule. By conducting a thorough analysis of the costs and timeline implications of a change, project managers can make informed decisions about whether or not to proceed with the change. This proactive approach can help minimize the risk of cost overruns and delays.
4. Negotiate Fairly
When negotiating change orders with clients, subcontractors, or suppliers, it is important to approach the process with a spirit of fairness and collaboration. Project managers should strive to reach mutually beneficial agreements that are transparent and equitable for all parties involved. By fostering a culture of fairness and cooperation, project managers can minimize conflicts and build trust with stakeholders.
Benefits of Effective Change Order Management

Minimize cost overruns
Prevent delays in construction
Improve client satisfaction
Enhance project profitability

Managing change orders is a critical aspect of successful construction project management. By implementing effective strategies for managing change orders, project managers can minimize cost overruns, prevent delays, and improve client satisfaction. By prioritizing clear communication, thorough documentation, thorough impact assessments, and fair negotiation, construction companies can mitigate the risks associated with change orders and ensure the successful completion of their projects.
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