JLL Change Order process

Jones Lang LaSalle | Real Value in a Changing World

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JLL REAL VALUE METHOD: CHANGE ORDERS

JLL’S VALUE PROPOSITION FOR CHANGE ORDERS

Given the increasing technical and management complexities of building development projects, it has become

clear that delivering consistent expertise in a manner that is transparent and measurable is a major challenge. The

JLL Real Value Method brings an updated value proposition to the change order management process which

reflects forward thinking and approaches that have become more common in product delivery in high-skilled,

knowledge-based industries including aerospace (at NASA), healthcare, and real estate project management.

These methods—especially those outlined by Atul Gawande, a Harvard Medical School surgeon and MacArthur

Foundation “genius prize” recipient, in his acclaimed text Checklist Manifesto—have been adapted to the best

practices, experience and knowledge of JLL to produce a guide for project managers on development projects with

high change order volume. The JLL method promises the following value proposition:

� Offer demonstrable value (quantified value and/or tangible value)

� Present audit-style review, explanations, and clarity that stand on their own

� Understand source of change order and apply knowledge to minimize future changes

� Calculate and confirm rates, hours, and material billings

� Give client confidence in the change order review process and JLL interpretation of changes

� Expedite change order review with use of checklists and automated calculation templates

STEP 1: VENDOR CONTRACT KNOWLEDGE

Before reviewing change orders for a vendor it is important to familiarize yourself with the key terms in the

contract documentation, particularly those terms that relate to changes, schedule, and scope. The traditional

review process involves simply becoming knowledgeable of the terms in this documentation. The problem with the

traditional method is that after review tens of change orders over several months, the recall of specific detailed

language often becomes hazy. Even frequent reference of the contract documentation leaves a high potential for

missing key language that could be useful in responding to change orders.

The JLL Real Value method, however, follows a check-list routine whereby the project managers prepare a

checklist of the most important contractual terms for a vendor typically involved in change order processing. This

check-list is categorized by terms relating to (1) changes, (2) schedule, and (3) scope. The likely contract documents

to source terms from include: the CM agreement, the 3A pages, Form 36 pages, specifications, and closing notes.

Noting the source and article number/letter of the term in the checklist is necessary. This checklist typically should

not be more than 3 pages total.

Once a project manager has put together a summary check-list of terms for a vendor, that sheet should be used to

review each change order. Any pertinent terms informing the decision on a change order should be cited in a sheet

attached to the final reviewed change order with Key References. Terms can quickly be copied and pasted from

the checklist to this final review sheet.


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BENEFITS

� Less likelihood of project manager over-looking or forgetting relevant contract knowledge when reviewing a

change order.

� The client has tangible documentation that demonstrates that project managers have in fact carefully

reviewed and considered specific contract terms.

� Final change order decisions appear less arbitrary

� It is much easier for project managers to negotiate change orders when they can immediately cite the contract

language that informed their decision-making process.

Figure 1: Example of COR review checklist

STEP 2: COMPLETE THE CHANGE ORDER REVIEW SHEET

Every change order should have a change order review sheet with audit-style findings, a short description and

explanation of the rationale behind the decision. The Change Order Review Sheet (1 page max) should have the

following sections:

� Change Order proposed cost vs. JLL recommended cost after review

� Notes:


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o A one-sentence opinion on JLL recommended value for the change order;

o A one-sentence description of the change order request;

o 2-4 sentence description of the rationale behind the decision-making process, citing the guiding

contractual sources or highlighting any discrepancies.

o A one-sentence note on whether the rates and calculations are correct (and citing any errors if they

exist).

� Key References—Copy and pasted abridged terms from the contract terms checklist OR the actual contract

documents if the guiding contract source was atypical and not listed in the checklist.

� Sign-off—signature of project manager approving the change order review

Figure 2: Example of Change Order Review Sheet


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STEP 3: CREATE AN AUTOMATED RATES AND CALCULATION SPREADSHEET FOR A VENDOR

To further expedite the review process and reduce potential calculation errors, prepare a spreadsheet with

correct rates which can be used to quickly check calculations for change orders. Attach this document to the

Change Order Review Sheet to back up findings. Additionally, daily construction reports or other project

documents used to review the number of labor hours and the change proposal request should be attached as

back-up documentation to the change proposal.

Figure 3: Change Proposal Calculation Template

In the end, the Change Order Review Sheet, the Calculation Template, and other supporting documentation are

attached to the change order document as tangible back-up documentation and support for the decision.

JLL Change Order process

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