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Construction Change Orders: 5 Best Practices You Can Implement Now

By: Greg Seldon  |  October 26, 2021

 

Construction change order requests, or CORs as they are more commonly known, have a huge impact on construction project finances. Best case scenario, poor processes are expensive. Worse case, business reputation falters and legal disputes become a realistic possibility. On the other hand, even small improvements to your processes can have major, positive impacts.

On the subcontractor side, a great process means your CORs get approved more easily and are processed quicker.  That’s good for cashflow and making the GC’s life easier has zero downside.  

On the GC side, a great COR process allows you to more accurately maintain project costs, cut down on administrative overhead and generally, allow your project management team(s) to focus on other components of the project... 

There are a few measures that contractors can take to see immediate results. In this article, we outline 5 construction change order best practices that you can implement now to see measurable results.

Top 5 Construction Change Order Best Practices:

  1. Replace paper time & material tags with a digital system
  2. Improve change order forms by eliminating handwriting and attaching photos and other documentation
  3. Submit your change orders on time and at the optimal time
  4. Replace spreadsheet-based Change Order Logs with automated, real-time COR logs
  5. Consolidate change order communication into a single channel to eliminate unruly email chains 

1. Eliminate paper extra work tags

Let's start with paper extra work tags on construction sites. They're outdated and cumbersome for everyone involved. Between filling them out by hand, getting them signed, transporting them to the office, scanning, and pricing them, paper tags require hours of unnecessary administrative work for contractors. Plus, they're easily misplaced, and once they're gone... they're gone. (See: this example where they literally flew out a window!) 

Switching to digital extra work tags can greatly reduce the time it takes to process a construction change order. With a digital tag, everything is recorded and uploaded immediately using a mobile device in the field. That means tags never get lost, your administrative staff will be grateful (and save significant time), and the resulting CORs will be dramatically cleaner and better documented as a result. 

2. Document clearly

If your documentation is giving the project manager or administrator a headache, you’re doing it wrong. Nobody wants to read through a bunch of jumbled chicken scratch and try to figure out what your change order is for.

Whether it's due to illegible handwriting, lack of attached photos, nonspecific descriptions, or something else, sloppy documentation leads to undesired outcomes. 

Worse case, it simply gets rejected. You then either take the financial hit or spend a bunch of time tracking down info (if it’s still available), cleaning it up and resubmitting. Not much better, it gets put in the “I’ll deal with this later” pile and both teams have to then go back and spend unnecessary time with back and forth emails trying to clarify.

The best practice is to document Change Orders clearly and thoroughly from the get-go. Everything you submit to your customer represents the quality of your work. Sloppy or unprofessional documentation is frustrating and slows down projects. 

Include photos that make it simple for customers to understand the work your extra work order represents. This will decrease the amount of time your customer has to spend figuring out your COR and you’ll increase the speed getting it approved. Sloppy or unclear documentation might save a few minutes on the front end, but it makes it difficult for customers to decipher what you need, and your CORs run the risk of getting rejected, ignored or delayed as a result.

3. Submit CORs on time and at optimal times

We’re all busy with competing priorities, but letting CORs marinate in the office before getting submitted creates real  risk to contractors. 

The longer Subcontractors wait to submit a COR, the less likely their GC will remember the details and pricing that may have only been agreed upon verbally. CORs that come in too late are often disputed or rejected, so Subcontractors should submit their requests as soon as possible. 

For GCs, it's important to keep in mind that owners don't like surprises. Delayed Change Orders can cause serious sticker shock, and they make it difficult to keep project costs in check. 

It also pays to submit CORs during optimal times. While it may sound silly, sending emails at certain times of day (late afternoons) or on certain days (Fridays) means that email is more likely to get lost in your customer's inbox. It's a best practice to submit your CORs promptly and to time them so they land during peak work hours, when the recipient is likely at their desk.

4. Track costs in real time by automating your COR Log

We've said it before: The Change Order Request log is, arguably, the most important document in commercial construction. It’s the only tracking document shared between the Subcontractor and General Contractor, and it allows them to account for every single extra work cost. 

Want to improve your COR Log immediately? Move away from manual, spreadsheet-based change order logs and transition to one that updates automatically as new Change Orders are submitted and approved.

If you’re still using a spreadsheet-based log, chances are, it’s getting shared as a PDF or the spreadsheet is shared directly. As soon as it’s sent out, the log is out-of-date until the next one is sent. This leaves massive potential blind spots for the project teams – especially when you start looking at large-scale, commercial projects with scores of subcontractors. 

Then, there’s the human error component. If a subcontractor forgets to include a Change Order Request or makes a typo in their log, the General Contractor is either presenting outdated or inaccurate costs  When late CORs eventually get submitted, or errors get corrected, it results in a surprise for the owner and increases the risk of being rejected.  

Spreadsheet based COR templates are also just an administrative time suck. Adopting a digital COR log enables contractors to track costs in real time.  This means that construction change orders are automatically captured, which significantly reduces the likelihood of error. Your trade partners are able to see all current CORs without having to make a request and without delay. And finally, the administrative time savings are huge.

Combined, this decreases the risk of sticker shock or surprise costs down the line, everyone has access to a complete picture at any given moment throughout construction, and you’re saving a ton of overhead by not paying expensive wages on data entry to keep your change order log updated. 

5. Remove email from the Change Order process

Documenting and submitting CORs is challenging enough, but it’s not like you hit the send button and you’re done. Contractors are still tasked with following up after they're submitted. 

One of the most common complaints we hear from contractors is that they submit CORs via email only to hear radio silence. Presumably, the request was lost in their customer's inbox, and several follow ups are often necessary before they will get a response. Next thing you know, you’re on a 15-deep email thread because someone had a couple of quick questions about a line or two. Now, multiply that on the GC-side, by scores of subcontractors. The Project Manager or Administrator is hunting through 20 different 15-deep email threads. Bottom line, it makes an already challenging process more difficult.

Removing email from the construction Change Order process streamlines communication and results in a much smoother process for everyone. As a best practice, contractors should look at replacing email with a dedicated Change Order communication platform. A COR communication platform serves as a single source of communication for trade partners. You’ll get the benefit of keeping things organized in a single, project-specific thread, while retaining the ability to do things like make notes, tag people with questions, collect signatures and more. The purpose-built tools are typically ROI-positive from the administrative time savings alone.

These change order best practices stand on their own, but yes, we do offer an all-in-one solution.

Extracker is the modern solution for Change Order Communication that allows GCs, Subcontractors, and Owners to collaborate in real time using a suite of digital tools. 

Extracker doesn't just save time by streamlining your existing procedures, it also improves collaboration and reduces risk. 

Extracker works as a stand-alone platform, or, integrates seamlessly with the industry’s leading project management platforms.

When you’re ready to implement these best practices, schedule a demo with our team.


Greg Seldon
Greg Seldon

Greg Seldon is the Director of Sales at Extracker. Prior to joining Extracker, Greg ran procurement for Clark Construction’s West Coast division. After seeing Extracker in action solving long-standing challenges, he joined the team to spread its reach across the industry.

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