Change orders (also known as change orders or amendments) are common in commercial construction contracting. Change orders can be challenging because they sometimes come with additional costs and penalties, require additional time to complete, or alter the scope of work.
For example, adding a room or a bathroom requires an increase in the cost since it requires a new foundation, another wall, and plumbing. The scope of work also must be updated to ensure that the commercial Construction Company Atherton does not miss anything.
Commercial and General Contractor Redwood City have experience working with change orders in commercial construction contracting. In this article, we provide you with some useful insights into change orders and manage them effectively in your project.
How Does A Change Order Occur In Commercial Construction?
In most cases, the customer proposes a change order because the scope of work was not detailed in the original contract. The contractor then submits a proposal to address the change order. The key is to ensure that the change order is approved by the customer and does not exceed the contract’s budget. If both parties agree on the change order, it is ready to be executed.
If not, the contractor is expected to provide a final proposal detailing the reason for the change. The customer then decides whether to approve the change. To avoid changing the scope of work, the commercial Design And Build Contractor San Carlos must monitor the project closely and be alert to changes in the scope. It can also keep a daily log of any changes in the scope of work.
What Are The Risks Of Accepting A Change Order?
The key risk of accepting a change order is that the customer may ask for something outside the scope of work. If the contractor fails to notify the customer promptly, it could result in a breach of contract and be subject to penalties, damages, or termination.
The change order could also increase the cost of the project, which could lead to a dispute between the commercial contractor for Design And Build Emerald Hills and the project owner. Change orders must be carefully and carefully managed to avoid significant risks.
To manage the risk, the commercial Construction Company Atherton must clearly define the change order, document the reason for the change order, clearly define the scope of work after the change, and clearly define the scope of work before the change.
Managing Additional Costs In Construction Contracting Due To Change Order
Change orders often result in additional costs. This could be due to additional costs for the work (such as adding a room or a bathroom requires an increase in the cost since it requires a new foundation, another wall, and plumbing.), the time needed to complete the work, or the need to adjust the scope of work.
The contractor must carefully manage the additional cost in order not to overcharge the customer. The contractor must clearly define the additional costs in the change order, document the reason for the additional cost, clearly define the scope of work after the change, and clearly define the scope of work before the change.
Change orders can be challenging in commercial construction contracting. But they do not have to be a source of risk for the contractor. If the contractor can manage change orders and the additional costs that come with them, it can be an opportunity for additional revenue in the construction business.