Change Order Dos and Don'ts

Our Philosophy:

To make every effort, beginning at the earliest possible stages of a project, to minimize the exposure and risk of change orders to our clients, our subcontractors, and to Swinerton Builders. Our Project Team will thoroughly understand all contractual provisions regarding changes and change orders. When changes do occur, we will comply with these provisions and, at all times, protect and defend the rights of Swinerton Builders as provided by our contract.

We will always strive to advise and inform our client of impending changes with related costs and schedule impact in a timely manner. This is our obligation. We will then make every effort to address and close these issues in an expedited manner.

We will always conduct ourselves in an ethical "fair and equitable" manner, both with our clients and subcontractors, when addressing change orders.

We will consider our relationships with clients and subcontractors, now and in the future, when managing change order issues.

The DO's and DONT's of Change Management:



Obtain written authorization from an authorized agent of the owner, prior to initiating a scope change or committing cost that is not in the current contract.

Accept or proceed with scope changes from the design team without the authorization of the owner.

Set up a PCI for any issue that MAY have a potential impact to Cost OR Schedule.

Delay setting up a PCI to determine if an issue does or doesn't have a potential impact to Cost OR Schedule

Inform your Owner in writing that there MAY be a potential impact to Cost OR Schedule for every issue.

Assume that your Owner knows there is a potential change just because someone issued us a change document – they come in from many different avenues.

Establish a protocol for communicating with your Owner, and Designer if applicable, for how and when you will regularly discuss resolving Change Order requests.

Discuss change Orders only as an item on your weekly Owner meeting. Too often by the time you get to that point, no one has the energy to discuss or resolve Change Orders and it gets put off.

Schedule an OCO issuance, a minimum of once a month, to capture all possible PCI's in process and get them into the next billing. Prepare the OCO to expedite the process if necessary.

Wait for the Owner to issue the OCO when they can get around to it.

Put a Rough-Order-of-Magnitude (ROM) on ALL PCI's when they are first set up.

Open PCI's with $0 or TBD in the Estimate Column

Provide alternate or optional pricing in a timely enough manner to allow your Owner to make appropriate GO-NO GO decisions on options with his/her management

Surprise Owners with "late" pricing and an "I need a decision today" COR presentation that pins your Owner into a corner. You may get that answer, but you may not get the next ones you need.

Always ask for time on COR's to reserve your rights to a time extension and additional costs.

Submit COR's with schedule impact equal to zero, unless there is no impact to the schedule of any kind with the change.

Reserve your rights for costs for time extensions at a later date in your COR cover letters and Owner Change Orders.

Ignore cost impact for time extensions in your COR's and OCOs then hope to file a "claim" later for schedule impact of cumulative changes.

Reconcile your contract allowances with a COR, even if it is a no cost change to document the Contractual resolution to every allowance. Reconcile your allowances timely so the material required will show up when needed on the job and won't have contributed to a schedule delay.

Spend any allowance money without Owner approval. Even if final $ aren't reconciled, get interim/partial releases. NEVER exceed spending for an allowance without Owner approval. This is a sure way to mess up an Owner's budget and confidence in us at the same time, and we may have a hard time getting paid.

Bill for in-process changes to the full extent provided for in your contract.

Wait to bill for changes after they have been finally approved

Provide Field Superintendents PCI #'s for all T&M work authorized by the owner. Superintendents should sign tags only with PCI #'s clearly stated and note, "for verification of time only" on the tag.

Sign Subcontractor tags without proper owner authorization. This is especially important with overtime as we must have a clear understanding of who is to pay premium cost for each O.T. hour before it is expended.