When beginning a construction project, it is important to have as many factors as possible settled before work begins. You will likely meet with your client periodically as plans, drawings and studies develop, and with the information you gather, your North Carolina construction company is able to draft a contract that will cover every contingency you can imagine.
However, sometimes the progress of your project does not go as planned, and you may need to revise the expectations outlined in the contract. Because the contract is a legally binding document, it is not as easy as simply scratching out or erasing the old information and writing in the new. Instead, you will have to use a change order.
Common reasons for change orders
A change order request can come from issues related to any party in the contract when those issues change the scope of the project. Without a change order, you may be liable if your company is unable to complete the project according to the specifications in the contract even if you and the project owner verbally agreed to an extension. The change order helps protect you in these situations. Some reasons for a change order include any of the following or others:
- Your client requests significant changes in the original design or wants to begin the project before the designs are complete.
- The requirements from the consultants doing the construction drawing and those doing the specs do not agree.
- The party responsible for soil testing did not complete the task or did not foresee certain conditions that greatly affect the outcome of the project.
- You or your subcontractors are unable to locate certain materials and must make substitutions, which may alter the cost of the project or the time needed for completion.
The most common reason you may need a change order is because critical information is missing or incorrect in the original contract. This may include inaccurate drawings, incomplete details or misrepresented data that can impact the successful and safe completion of the work.
Change orders may bring the work on your project to a halt while you and the owner negotiate differences, and this can result in damage to your bottom line as well as your company's reputation. You may be able to include stipulations in your contract for managing change orders since they are fairly common occurrences, especially with design-build projects. This may eliminate some of the disputes that arise when contract adjustments are necessary.