What’s the most important document in commercial construction? Spoiler… It’s the Change Order Request Log
Ever hear about a construction project that wound up wildly over budget? The big ones make headlines and often generate lawsuits, but in reality, cost overruns occur every day in the construction industry.
Any number of factors can cause construction projects to go over budget: last-minute design changes, bad estimates, material cost increases, labor shortages, and unforeseen jobsite conditions, to name a few.
But one constant: All of these extra costs are generated through Subcontractor Change Order Requests.
Across the industry, Subcontractor Change Order Requests are gathered and tallied by scraping through General Contractors busy inboxes. Subcontractors email their General Contractor with Change Order Requests as they come up. The General Contractor collects these documents, saves them “somewhere” and then inputs them manually into Excel or a project management software system (i.e. CMiC, Procore, Prolog, etc.).
The Change Order Request log is the only tracking document shared between the Subcontractor and General Contractor. This document is the only way a General Contractor can be certain they have accounted for every single one of the Subcontractors costs.
Staying atop this manual process is key to being a successful General Contractor. But with all the moving parts on a construction project, it is easy for General Contractors to fall behind on tracking every Subcontractor’s multiple change orders.
This is why the Subcontractor Change Order Request log is the most important document in the construction industry.
One of the biggest fears of General Contractors is unaccounted cost exposure from Change Order Requests. That’s why every GC is constantly requesting an up-to-date COR log from each of their Subcontractors. The log is reconciled against what has been entered into their system to confirm all costs are up to date. With 10, 20, 30 or more Subcontractors on a project, this cumbersome, administrative task becomes a full-time job. If the Subcontractor log is incorrect, out of date or arrives late, it can have huge financial consequences for all project stakeholders.
For example, a Subcontractor sends a log but forgets or accidentally misses one $5,000 Change Order Request. Unaware of the missing cost, the General Contractor informs his or her client the budget is up to date. A month goes by and the Subcontractor emails the GC asking about the missed COR’s status. What now? The GC cannot easily go back to the customer without a fight or at least an awkward conversation. If the owner rejects the $5,000 charge because it is too late, the GC and the Subcontractor often get into an argument over who will eat the $5,000 cost.
Multiply this similar situation by dozens of Change Order Requests from dozens of Subcontractors and the disputed amounts can easily add into the millions.
Why not get rid of the error-prone, paper-centric system of the past? With Extracker, you’ve got a simple but powerful platform where every change order is submitted, tallied, and shared between contractor and customer in real-time from any web or mobile device. Eliminate Subcontractor Change Order Request logs entirely and track all project costs instantly between Subcontractors and General Contractors.