Change order

Revision as of 14:38, 22 September 2017

Change orders is a common problem within the construction industry. A change order is a change within the original plan for the project which might cause changes in terms of delaying the project and add to the original budget so the project becomes more expensive than first estimated, it is therefore desirable to reduce the amount of change orders within a project. A change order might occur both in the design and construction phase of a project. A change order can be a change in the placement of pipes and the free height in the building. If there are pipes which are placed at the same place, the free height might not live up to the requirements from the building owner, and therefore there has to be a change in the design. Another change could be that the building owner want to make changes to the design of the building as it did not live up to his or hers expectation. The earlier the change the better as the changes are more easily integrated in the project and therefor it reduces the risk of delays and exceed projects.

There are several ways one might be able to reduce the amount of change orders. For instance BIM and virtual reality will make the building owner able to see the building before it is built and thereby make sure it looks like what he or she wants it to.

Change orders in the construction industry

Change orders is a common thing in the construction industry and almost every project will at one time or another experience a change in the original project plan. It can be in terms of changes in the design, like the materials used in the building, the placement of walls if the usage of the building changes and in general the overall design of the building. The request for changes like this will can come from the building owner, which through the project has changed his or hers mind about the design or their economic change throughout the project. Another reason the design might need changes is if a new regulation is launched, which the building then need to live up to. This can make changes in the design in terms of new requirements for the fire safety which might change some part of the building.

Change of the project can happen both in the design phase of the project but also when the actual construction has begun as some problems might not the seen before the construction has begun. The changes found in the design will often cost less compared to changes later on in the project, as there will not be a charge in terms of redoing things that has already been made. Change orders that might occur when construction has begun can be placement of different system within the building as there might be a collision between these if this has not been checked before the construction is started. Another problem might be bad soil condition which was not foreseen before, which then might lead to a need for a different and maybe more expensive foundation for the building. This can be discovered in the design phase and maybe even before the contractor has bought the materials for the original foundation, which will reduce the cost of the change.

A change order can also occur if the project has not been estimated correctly from the beginning of the project. This can be due to misunderstanding the scale of the problem and thereby unintentional underbid on the project. ^[1].

Why is change orders a problem

Change orders is a problem as it might up the cost of a project and therefore the budget might exceed what it is suppose to be. It is normal that the cost of change order will be around 10-15% more than if the change has been included in the original bid on the project.^[2]. Changes in the orginal plan might also reduce the overall cost of the project. This can for instance be of there is a change in the materials used in the construction, though changes like this might have to be done before the construction has begun as the contractors have to buy the materials in order to build.

Another problem with change orders is that it might prolong the project as it takes time to make changes in the design of the building especially if the change first is made when construction has started. A change that might occur after the construction phase is stated is fixing already built things, like a damaged installation, which then need to be changed for a new one, which will cost more as there need a new part and then there is the added cost of man hours to remove the old and install the new.There often are a compensation to the contractors if the project is delayed which then again result in a higher cost of the project than firstly estimated.

Confusion within the project and the plan for this can also be a problem in terms of change orders. This will most likely only become a problem if there are a made a lot of changes without good communication to all involved in the project. When this happens more errors might happen and then this result in more changes to the project.^[3].

How to reduce change orders

There are different ways which can help reduce change orders when doing a construction project. One could be using BIM and virtual reality as a integrated part of the project. When using BIM it is possible to use the program called Solibri, which is able to tell if there are conflicts between different models. This could be the models show where the pipes, which have different uses, should be or it could be checking that the architect model is consistent with the structural model. Futhermore when using virtual reality it is possible for the client to get a better view of their building before it is build, which then make it easy to make changes in the design if the building does not live up to the expectations of the client.^[4].

Another method which can be used in order to lower the amount of change orders are value management. Value can be determined as a balance between cost, time and quality. This method makes it clear what is important for the client and therefor what brings value to the project in their perspective. If these are taken into perspective from the beginning of the project, is it possible to make a design which live up to the client's standard, and thereby reducing the risk of change orders. ref name="Value">Rangelova, F. and Traykova, M., "Value management in construction project, 2007 </ref>.

References

1. ↑ Cooper, A., Common causes of change orders, Ec and M: Electrical construction and maintenance, 2015 volume 114, issue 4.
2. ↑ O'Leary, A., Coping With Change Orders. Keeping Confusion Under Control and Limiting Disputes, 2009. Available at: http://www.dcd.com/oleary/oleary_ja_2002.html .
3. ↑ Molly, Katherine K., Six steps for successful change order management, Cost Engineering (morgantown, West Virginia), 2007, Volume 49, Issue 4, pp. 12-19
4. ↑ How Virtual Reality Will Change the Construction Industry. Available at: http://www.constructionworld.org/virtual-reality-will-change-construction-industry/.