Reduction Of The Impact Of Exchange Orders

The software that manages construction change orders avoids this problem by providing all parties with real-time information about requests, streamlining the change order approval process. The software can automatically direct the exchange Procore software review command to the right person and produce documentation for future audits. More information and data available, project managers are better able to minimize the cost and impact of the schedule when an exchange job is taking place.

When this level of information exchange is possible, it becomes easier for staff to raise red flags on issues that, if not addressed, can lead to changes in orders. For example, differences between plans and expectations of different subcontractors will be clearly visible when everyone works from a consistent set of shared numbers. Project owners who have access to these figures are also less likely to request last-minute changes as they set expectations directly from the sole source of data truth. You should also know that most of the changes that occur in construction relate to unforeseen circumstances such as rising material prices.

Changing orders that require time for approval due to a lack of decision-making capacity or where an independent cost assessment will take place can delay the project schedule and can have a significant impact on project costs. Exchange orders are an integral part of construction project management. Well managed, they can be used to determine customer expectations and control project costs. Please note that everyone will become part of the housing contract after approval, so make sure to use an exchange order large or small for any change in the size of the work. While you cannot anticipate all possible issues, you can reduce the need to change orders with a proactive, detail-oriented approach. For example, indirect costs that are not justified in advance can lead to change requests during construction.

And as we always mention, clear communication must be established for this. The use of reliable construction project management software such as Pro Crew Schedule can strengthen communication by improving the flow of information between both parties. In this way, updates on prices, processes and progress can be communicated immediately, so that problems can be solved immediately, eliminating the need for greater changes. Exchange orders remain one of the most frustrating problems in the construction industry and seem to be sneaking up on owners and contractors to increase costs and extend project schedules. Even if all financial and planning systems are in order, a last minute change can decipher everything, making decision makers feel they have no choice but to throw more money into the project to keep it on time. Exchange orders represent on average about 8-14% of all capital structures.

While it is impossible to detect any error and danger without costly and invasive investigation, the project team should aim to evaluate the location and / or existing building for signs of defects. In addition, there must be adequate risk management processes, identifying, quantifying and obtaining a control measure for each potential cost. An unforeseen event must be reserved as an additional “punch box” for the budget if orders change unforeseen circumstances. While many change orders are perfectly valid, questionable and controversial costs can be really bothersome. With the cost overruns, delays and affected relationships that you leave in your wake, your bad reputation is really enough.

It is logical that questions arise during the bidding and project construction phases. While contractors are working on estimating your project, they may encounter gray areas and require clarification. These questions are sent as requests for information and the design team’s replies are shared with all bidders. This formal procedure guarantees a fair competition process, as all parties have access to the same information.

An exchange order record is the first step in organizing your process, but creating and tracking it can be optimized with project management software. However, if the exchange order process continues, or worse, when there is no agreed process to start, Contractors can do ad hoc work without approval to keep the project on time, risk not being paid for their efforts. Even if they stick to the established process, poorly managed change orders can cause long delays if parties negotiate costs or debate whether the requested change is really necessary.

The results indicate that those costs are transferred to developers and real estate funders in the form of project delays and increased offers from contractors. A construction change order is a great tool for documenting and managing requests for customer changes for the project. Some change requests are optional, such as a customer who decides to enlarge the master bedroom. When using the COMS facility owner and contractor, the facility owner agrees to use pre-set unit prices at the start of the project, simplifying and streamlining the entire pricing process.