Tips to Help Florida Contractors Manage Change Orders
When parties enter into a construction contract in Florida, they generally expect that the project will proceed according to the plans and specifications developed by a licensed design professional. These plans are developed prior to signing the contract, and they describe each specific component of the project and how it must be constructed. The problem is that, while everything may seem in order on paper, that can change quickly in the field. For this reason, change orders have long been a part of life in construction. Florida construction law defines a change order as any labor, services, or material which are authorized by the owner, and which are an addition or deletion to what was included in the original contract.
Additional definitions under Florida construction statutes state that a change order becomes part of the contract and the contract price. If managed properly, they can boost profits instead of causing the delays that give them a bad reputation. Advice from a South Florida contractor representation attorney is important, but some tips on handling change orders may also be useful.
Include Details in the Original Contract: Your construction contract should include provisions on making changes, but it is essential to be as specific as possible. In the agreement, you should cover:
- How to assess costs
- Adjusting the timeline to perform extra work
- Options for resolving disputes
- Potential changes to the method of construction
Do a Full Assessment of Cost: When you receive a request for changes, you will conduct an evaluation of the additional expenses for labor and supplies. However, you must also include various indirect costs. It is important to communicate these to the owner to avoid surprises, since many do not fully appreciate how their modifications increase the price tag. Do not overlook the expenses when you must reassign crews to handle a change order.
Get All Changes in Writing: It is easy to believe that you are on the same page as the owner when discussing changes, but you should always put things in writing. Make sure to include the full cost assessment, as well as details on:
- How this change order will affect the timeline
- Whether you will need to change the payment schedule
- Who is authorizing and signing the change order
Keep Meticulous Records on Change Orders: Besides the written change order signed by the owner, you should maintain and organize all documents related to each modification. When you keep records of all change orders, you can refer to them later if a dispute arises. You can also use the information to track performance indicators for future projects. With data on the average number of change orders and their impact on cost and schedule, you have insights on planning.
Discuss Change Order Practices with a Florida Contractor Representation Lawyer
These tips for managing change orders are useful, but you can trust our team at Linkhorst & Hockin, P.A. to assist with details. To learn more about our services, please call 561-626-8880 or go online to schedule a consultation at our offices in Jupiter, FL.