As a construction estimator or project manager, understanding the top reasons for change orders can help you better anticipate and mitigate potential issues before they arise. In this blog post, we’ll explore the most common causes of construction change orders and offer strategies for managing them effectively.

A construction change order is a written agreement that alters the original scope of work outlined in the construction contract. Change orders can involve modifications to the cost, schedule and/or quality of the project. These changes can occur at any stage of the project, from pre-construction to post-completion, and often arise due to unforeseen circumstances, design modifications or miscommunications.

While change orders are common, they are costly and disruptive to a project if not managed properly.

One of the most common reasons for construction change orders is a change in design. This could happen for several reasons, such as evolving client needs, new regulations or updated building codes. Design changes can also stem from miscommunication between the design team and the contractor or owner.

For instance, an owner might decide to upgrade the finishes, add additional features or modify room layouts after construction has begun. These design changes require adjustments to the scope of work, and as a result, contractors may need to revise their plans and costs.

How to Manage This Scenario: To minimize design-related change orders, ensure clear communication from the outset. Have a detailed design review process and ensure that any changes are documented properly. Encourage clients to finalize the design before work begins and make provisions for handling future changes smoothly.

Another cause of change orders is unforeseen site conditions. This can include issues like discovering unexpected soil conditions, existing utilities that weren’t documented or hazardous materials on-site. For example, while excavating for a foundation, contractors might encounter rock formations that weren’t expected, requiring additional labor or equipment.

Such conditions are often outside the control of both the contractor and the client. As a result, change orders are necessary to address the additional costs and time required to mitigate these unexpected challenges.

How to Manage This Scenario: Before starting the project, conduct thorough site surveys and environmental assessments to minimize the risk of unforeseen site conditions. Additionally, include contingency clauses in the contract to account for unexpected issues, and ensure that all parties involved are clear about the procedures for handling these situations.

Changes to local building codes, safety regulations or zoning laws can also lead to change orders. These regulations are constantly evolving to ensure public safety and environmental sustainability. A project that begins under one set of regulations might face new requirements by the time it’s midway through construction.

How to Manage This Scenario: Stay up-to-date on local building codes and regulations, and communicate with your design and construction teams about potential changes. Also, work closely with local authorities and inspectors to ensure that your project is compliant with the latest laws, which can help reduce the risk of construction change orders related to regulatory issues.

As a project progresses, clients may want to add, remove or modify certain features. These requests could range from simple cosmetic changes, like altering paint colors, to more substantial changes, such as adding an extra floor or installing more expensive materials.

While clients have the right to request changes, it’s crucial to manage these requests carefully to avoid project disruptions. Clients may not always understand the implications of their requests on the project’s timeline or cost, so educating them is key.

How to Manage This Scenario: Establish a clear process for handling client requests and ensure that all changes are documented through formal change orders. Set expectations from the beginning regarding how changes will affect cost and schedule, and consider offering a fixed price or allowance for potential client-requested modifications.

Errors or omissions in the original construction documents can involve missing details, unclear instructions or incorrect specifications in the original plans. When the contractor discovers these issues during construction, adjustments need to be made to keep the project moving forward.

For instance, a mistake in the electrical blueprint might require a redesign of the wiring layout, or the wrong materials might have been specified, requiring a change in procurement.

How to Manage This Scenario: Thoroughly review all construction documents before work begins to identify potential errors. Ensure that plans are accurate and complete. Having a robust quality control process in place can help catch errors early and prevent costly revisions during construction.

Sometimes, unexpected budget constraints or funding issues can force a project to scale back or alter its scope. In other cases, unforeseen costs may require adjustments to the project to stay within budget.

How to Manage This Scenario: Clearly define the project’s budget and financial limits from the beginning. Establish a transparent communication channel with the client about costs and ensure they understand the implications of financial changes. Include allowances for potential financial shifts in the contract and regularly review the budget to avoid surprises.

Change orders are a common, and sometimes inevitable, part of the construction process. By understanding the top reasons for change orders, you and your team can take proactive steps to minimize disruptions, maintain budget control and ensure the project stays on track.