Change Orders and Average Cost Impact to the Project (Industry Survey)

Changes are a part of the construction process with many underlying causes.

D. Brown Management Profile Picture
Share

While we have all heard the average of 10% changes on construction projects, it is interesting to look at an industry study for validation.  

Change Management: Project Changes, state of the industry survey.

This study by HBRC categorized the range of contract changes and the percent of projects within that range. The average is 10% and none of the projects had 0% changes.  

Engaging key contractors to work on the project earlier will lower the amount of changes related to design conflicts while protecting the aesthetics of the design.  

Another interesting part of the study was that 43% of respondents DID NOT have a consistent process for managing changes.  

A rigorous change management process starts at the earliest stages of design development with rigorous weekly reviews.  

During construction, the definition of a change should be broadened beyond what may become a cost issue for the project owner and also managed through a rigorous weekly process such the Last Planner System.  


Change Orders and Average Cost Impact to the Project (Industry Survey)
Change orders are a fact of life in construction. Improve profitability, cash flow and customer satisfaction by effectively managing changes. Build a foundation for success with 12 steps to improve pricing and 11 negotiating strategies for the whole project team....

Related Training
Change Orders and Average Cost Impact to the Project (Industry Survey)
Change orders are a fact of life in construction. Improve profitability, cash flow and customer satisfaction by effectively managing changes. Build a foundation for success with 12 steps to improve pricing and 11 negotiating strategies for the whole project team....

Impacted Productivity - Disrupted Workflow (No Schedule "Flow")
One of the biggest impacts to productivity in construction is when tasks cannot be completed as planned. When this happens frequently, it starts to impact every aspect of the contractor’s scoreboard in a negative way starting with customer satisfaction.
Early Identification is a Process - Effectively Using Checklists
Few things will improve customer satisfaction, profitability, cash flow, risk, and team stress more than early identification of change orders. This is a process and a trainable skill. Checklists are some of the most valuable tools in that process.
Change Tracking Log & Management
Great change management starts with a good tracking system. The far more important part of change management is the rigorous review process at least 2X monthly with your PMs that will limit your risk, increase your opportunities, and train your team.