Manage the Risk of Construction Changes

Construction projects are riddled with risk.  Differing site conditions, changes, delays, bad weather, potential cash flow problems, and claims, to name a few.  Good construction contracts should help to reduce the risks of uncertainty by planning and predicting how to deal with problems.

Almost any problem on a construction project can be traced to one of two things: changes or delays (even delays are really just changes).  As in life, embrace and manage the change don’t run from it.

For Contractors:

  • Understand and apply the changes clause in your contract;
  • Provide written notice;
  • Keep working on unchanged work to mitigate delays (read more);
  • Confirm your entitlement under the contract terms;
  • Track and timely present your estimated and actual costs to the Owner; and
  • Timely present a complete and well-reasoned story about the change to the Owner.

For Owners:

  • Understand and follow the changes clause in your contract (you probably have obligations even if you disagree there is a change);
  • Clearly communicate in writing your complete or partial (dis)agreement with a change; and
  • Timely and reasonably review and consider claims or change proposals (you have more control during the Project than afterwards).

Construction Project Life Cycle

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