Change Orders on a Claremont Build

A change order is the most misunderstood document on a construction job. Owners treat it as a request. Builders treat it as an amendment to a signed contract, because that is what it is. Every change order alters scope, price and schedule at the same time, and the projects that end badly are almost never the ones with a single big change. They are the ones with forty small ones, none of which was individually alarming.

This deepens the new-construction guide and follows naturally from the choosing a builder, since the contract you sign determines how painful this process will be.

What a change order actually is

A properly written change order names four things: what is being added or removed, what it does to the contract price, what it does to the contract completion date, and who signed off. If any of those four is missing, it is not a change order. It is a conversation that both parties will remember differently.

The three-part effect is the part owners underestimate. A change is rarely just money. It can put a trade out of sequence, and out of sequence means waiting for that trade to come back, which can idle the trades behind it. That is why a modest change can move a completion date by more than its own duration.

Where change orders come from

Owner-initiated changes

You see the framed space and it reads differently than the drawing did. This is normal and it is the most controllable category. The defense is to make decisions early, on paper, and to visit the site at the stages where a change is still cheap.

Unforeseen conditions

On a remodel or a rebuild, walls come open and reveal what is behind them. On new construction, the ground is the usual source: fill, water, unstable soil, buried debris, an old foundation, utilities not where the record showed them. These are not the builder's fault and typically are not carried in the base price. Soils work done before the contract is the best available insurance, which is why the report deserves a careful read rather than a filing.

Design gaps

Drawings can be silent, ambiguous or internally inconsistent. Somebody has to decide, and deciding costs money. Good sets have fewer of these, which is one of the practical arguments for spending more time in design.

Agency requirements

A plan check comment, an inspection correction or a condition of approval can require work that was not drawn. Building and planning requirements are specific to the parcel and the project, and the City of Claremont's building and planning counters are the authority on what applies to yours. Ask them directly rather than relying on what was true for a neighbor's project.

How the pricing is built

Change order pricing usually equals the direct cost of labor and material, plus the subcontractor's markup, plus the general contractor's overhead and profit percentage from the contract, plus any credit for work removed. Two things are worth knowing.

Deletions rarely credit back as much as owners expect, because the overhead of managing the job does not shrink when one item leaves it. And a change made after related work is complete carries the cost of undoing that work as well as doing the new one. The same change is a different price at three different weeks.

Ask for pricing to be broken out rather than delivered as a single number. A one-line change order is not dishonest, but it is unreviewable, and unreviewable pricing is where trust erodes.

Handling them well

Insist that no change is performed until it is written and signed, including the schedule impact. Verbal approval on a job site is how disputes start, and it puts the builder in a bad position too.

Keep a change order LOG with running totals for price and for days. The running total is the point. Individual changes read as reasonable; the log is what tells you the truth about where the project is.

Set a decision cadence. Weekly is a good rhythm for most residential jobs: pending items reviewed, priced, approved or dropped, all at once. Ad hoc decisions made in a hallway are the expensive kind.

Carry a contingency. A construction budget without one is a budget that will produce arguments, because there is nowhere for the unforeseen to go except into a fight about who should have known.

Allowances are change orders waiting to happen

An allowance is a placeholder: a dollar figure carried in the contract for an item that has not been selected yet, such as tile, lighting or appliances. Allowances are useful because they let a job start before every decision is made. They are also the quietest source of overruns, because an allowance set low enough to keep the contract number attractive will be exceeded by almost any real selection, and the difference arrives as a change order months later.

Two habits fix most of this. Ask what a given allowance actually buys, in real products, at real suppliers, before signing. And go shopping early rather than at the moment the trade needs the material, so the number is tested while there is still time to adjust the budget instead of the schedule.

The cheapest change order is the one made in design

Moving a wall on a drawing costs an hour of somebody's time. Moving it after framing costs framing, electrical, plumbing, insulation, drywall, paint and schedule. Moving it after drywall costs all of that plus demolition and disposal.

That escalating curve is the single strongest argument for slowing down at the beginning. Time spent in design feels like delay. It is the least expensive time on the entire project.

Continue with the building and buying new for how the pieces fit together, and read the permit field guide before you assume any change is purely a private matter between you and your builder. Anthony Grynchal has been licensed in California since November 2009.