Management of Potential Change Orders with As-builts

Tuesday, October 12, 2010

Every project is unique and requires an immense amount of skills and expertise to be completed successfully and on time. It is almost given that at some point or throughout the project you will be hiring an Architect and a General Building Contractor to design and build what you have in mind. This article is written with homeowner in mind as a guideline for a very interesting and education experience of remodeling your house which waits ahead of you. First thing that you as a homeowner should understand is the fact that construction project you are about to begin is complex.

Your role in the process is just as important: you will be playing in part a Construction Manager. Most likely your Architect will assume greater part of that responsibility: he or she will help you with the bid process, contracts, change order approval, etc.

The better the Architect you hire, the smoother and less costly the construction process will be. Unfortunately, many good Architects do not have sufficient time to spend on your projects and bad ones spend way too much. That is why some tasks and decisions might be best handled by you, the homeowner.

Most difficult decisions you will be making are associated with your contractor asking for an additional compensation. Under certain circumstances it is absolutely legitimate for your contractor to do so. Most good constructors do not like issuing change order as much as you do not like receiving them. In the end change orders are usually costing your contractor more trouble due to coordination problems.

The truth is that your contractor has to do so in order to cover an unexpected cost. The cost is usually unexpected for two reasons: the design team you had hired had missed or misrepresented an element on the drawings or in specifications (Type 1 Existing Conditions), or there is something that arouse during the construction process beyond anybody’s reasonable expectations (Type 2 Existing Conditions). The third time your contractor will be asking for more money is whenever you as a homeowner, decide to change all toilet fixtures to pure gold.

There is little that can be done with regard to the last tow cases: you just happened to have a 40-ton WWII tank berried in your back yard and your spouse absolutely has to have golden toilet fixtures. The First one, however, is something that you, a homeowner, can strategically avoid. Many Type 1 Existing Conditions which have the potential for causing change orders can be discovered, before the final bids are issued.

One of the most successful strategies used is a mandatory pre-bid site investigation. Mandatory inspection means that in order to bid on the project a a contractor must send one of its representatives on site during specified time. Like anything else in life, there are advantages and disadvantages to the idea.

The main advantage of the mandatory pre-site inspection is the fact that the bidders are seeing the scope of work, an estimator will better understand plans, and relay scope to operations executive who will determine if this type of project best fits the company.

Other advantages include the fact that good and knowledgeable contractors are asking questions. It is absolutely essential that you or your Architect carefully documents all asked questions and issue an Addendum to the plans and specifications to reflect misunderstandings. Should a dispute later arise as to who said what to whom, addendum may be your greatest leverage.

The fact is that most potential change order issues are resolved on paper. During the site visit the contractor and the owner are also getting to know each other; personal relations and impressions are major part of the decision maker for some people.

Sometime an owner may ask contractor to sign a contract with clauses in which the contractor acknowledges that it has thoroughly investigated the project, its site and the conditions. Questions like “How is one to gain access to the work?” will be also asked and you should be ready to answer them.

Disadvantages of the mandatory site visit include such issues as you may not have enough people to bid on the project and since everyone knows who else is bidding, decisions will be in part based on that, rather than the lowest cost which can be offered.

Contractor may often elevate the price knowing that there is not enough competition for the job. Whether you deicide to have one or not, one fact continues to be true: the more contractor knows, the less it will cost you, the less the contractor knows, the more spread out your bids will be and more likely it is that your project will be buried in change orders.

Probably the next thing besides a pre-bid inspection that will help you to cut the probability of a change order is an accurate set of asbuilt drawings. Depending on how long ago and how well the last construction project had happened, you might already have a set of asbuilt drawings sitting in your file.

If such is the case, you may want to transfer such data into CAD file format which will dramatically improve the design process performed by your Architect. If, which is more likely, you do not have an updated set of asbuilt drawings, it is essential that you obtain one. Representation of existing conditions will most likely be asked for by your permit issuing authority, there is almost no way around that.

Your Architect may sometime prepare such documentation for you, but it is recommended that you use an asbuilt service company to prepare such plans. Due to specialization in filed verifications, you will be getting a much better end product result at a lesser cost compared to your Architect.

Please use article “Your As-Builts Are Your Blueprint for Success” as a guide to understanding the selection process for an asbuilt service company.

Once the project has been started, there are several things you can do from "day one" on the project to prepare you well in the event of a construction dispute. At this point everything you do will only help you in future if it has word "paperwork" in it.

Keep a journal on daily basis, documenting progress, problems, issues, calls. You will never know which little detail will account for the largest change order for the project. Keeping track of everything is essential, but if you cannot, the least you can do is to make sure that weekly meetings are scheduled such that you may always attend one. Ask your Architect to keep detailed meeting minutes during these meetings. A less time costly way to keep track of your project is to take pictures.

While you may not be aware of any particular terms or practices used, most task of the construction process are visual, meaning that you get what you see. You only get to see the name and a type of a roof membrane used, for example, for a couple of days before it gets covered with shingles or other roofing material.

Taking 10-20 pictures every couple of days and simply storing them in a classified order by date on your computer is a very simple task that may help you avoid a costly change order, give you a change order “trading” advantage or simply remind you of all the good time you had building your home later in life. During construction process, you as a homeowner can ask your contractor to keep a updated set of redlines depicting all of the requests for information, clarifications, addenda and change orders.

Ask the contractor to bring an updated redline set to every weekly meeting and sign off the drawings. The redlines are often left unattended by a busty contractor and are done in the last possible minute. Practice of updating the plans throughout the project duration helps you, as a property owner, with documentation of all the changes and mutual understanding of what needs to be built.

Redlines are used to prepare a set of post-construction asbuilt drawings at the end of the project by the general contractor, giving you or the next owner a fresh blueprint to start-off with on any other remodeling that they might have.

The contractor usually collects asbuilt redline documentation form major subcontractors involved with Electrical, HVAC, Data, Fire Protection, etc and submits such data for documentation to an experienced asbuilt service company. Within weeks you should have an updates set of asbuilt plans reflecting newly remodeled residence. At this point, if all items on the punch list have been cleared, your contractor will file a final completion notice, signifying the end of the construction process.

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