PM : Change Orders

04/18/23Eppstein Uhen Architects 1

Monitoring & Reducing CHANGE ORDERS

p r e s e n t a t i o n


Presentation Outline

A. IntroductionB. Identify Issues C. Identify GoalsD. Collect Data (Macro)E. Analyze Results (Macro)F. Collect Data (Micro)G. Analyze Results (Micro)H. Strategy of ImprovementI. Conclusion


Introduction

A. Change Order: DescriptionA. Written instruction to the contractor issued

after execution of the agreement which authorizes an addition, deletion, or revision of the contract sum, contract time, or both.

B. AIA Document G701A. I:\Forms\AIA Forms\AIAG701 Change order.pdfB. Executed by the Owner (prepared by Architect) C. Agreed to by ALL: Owner, Contractor & Architect


Introduction

B. Types of Modifications:A. Requires a change to the contract sum or timeB. Does not require a change to the contract sum or

timeC. Examples:

A. Owner: A. Design change

B. Contractor: A. Suggests a change to facilitate constructionB. Suggests a product substitution

C. Design Team: A. Clarify documentsB. Errors or Omissions

D. Field: A. Unforeseen conditions require a modification

E. Others: A. AHJ (code interpretation)


Introduction

C. Initiating Modifications in the WorkA. Design Team

A. CB: Construction Bulletin (EUA-ism)A. I:\Forms\Architect\Construction Bulletin - Milwaukee.

dotB. S:\Studio2\General\Detail-Technical Library\Construc

tion Bulletin.dot

B. PR: Work Changes Proposal Request (AIA G709)A. I:\Forms\AIA Forms\G709 - Final.pdf

C. CCD: Construction Change Directives (AIA G714)A. I:\Forms\AIA Forms\G714 - Final.pdf

D. ASI: Architectural Supplemental Information (AIA G710)A. I:\Forms\AIA Forms\G710 - Final.pdf

E. FO: Field Order (CSI Form 13.4A)


Introduction

C. Initiating Changes in the WorkB. Contactor

A. RFI: Request for Information (Interpretation) B. COR: Change Order Request (Proposal) (CSI Form

13.6A)

C. OwnerA. Correspondences to Design Team and/or

GC/CMGC

D. OthersA. Vendors / SuppliersB. Code officialsC. Others?


Identify Issues

A. Tracking C.O.'s by ProjectA. Process & format: What do EUA PM’s use?

A. File search: A. Change Order.xls (Excel): 9 filesB. Change Order.mdb (Access): 0 filesC. Change Order.doc (Word): 0 files

B. No “global” database of C.O.'sA. By EUA

A. Future: Part of Vision

B. By studioA. Future: Building Type


Identify Goals

B. Reduce quantity and cost of C.O.'sA. Tangible Measurement of Project’s QC ProcessB. Utilize results as a……

A. Marketing ToolB. Budgeting ToolC. Client & GC ranking system

Change Order (% of CC)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2005 2006 2007 2008 2009 2010

(YEAR)

(% o

f T

ota

l Co

nst

Co

st)

Design Team (E/O)

Owner (Scope)

GC/CMGC (Field)

2005 $40,000,000 $700,000 $500,000 $750,000 $1,950,000 4.88%35.90% 25.64% 38.46%

2006 $45,000,000 $450,000 $400,000 $450,000 $1,300,000 2.89%34.62% 30.77% 34.62%

2007 $70,000,000 $500,000 $550,000 $500,000 $1,550,000 2.21%32.26% 35.48% 32.26%

2008 $75,000,000 $550,000 $600,000 $600,000 $1,750,000 2.33%31.43% 34.29% 34.29%

2009 $85,000,000 $600,000 $650,000 $500,000 $1,750,000 2.06%34.29% 37.14% 28.57%

2010 $100,000,000 $800,000 $750,000 $500,000 $2,050,000 2.05%39.02% 36.59% 24.39%

TOTALS $415,000,000 $3,600,002 $3,450,002 $3,300,002 $10,350,000 2.49%34.78% 33.33% 31.88%

YEAR Total CO $ % of CO/CCConst CostCHANGE ORDER Categories


Collect Data (Macro)

A. Historical Information A. PM’s supply data for (2) of their projects

A. Projects completed in 2004/2005 B. Project’s Construction CostC. Total C.O. Quantity (in $)

Project Name Project #

Project A1 X-XXXXX-XX $450,000 $45,000 10.00%Project B1 X-XXXXX-XX $475,000 $47,500 10.00%Project C1 X-XXXXX-XX $300,000 $15,000 5.00%Project D1 X-XXXXX-XX $250,000 $12,500 5.00%Project E1 X-XXXXX-XX $450,000 $90,000 20.00%Project F1 X-XXXXX-XX $200,000 $10,000 5.00%Project G1 X-XXXXX-XX $100,000 $15,000 15.00%Project H1 X-XXXXX-XX $150,000 $7,500 5.00%

$2,375,000 $242,500 10.21%

CO $ % of CO/CC

Insert new project above this row

TOTALS

PROJECT DESCRIPTIONConst $



A. Historical Information A. PM’s supply data for (1) of their projects

A. Total C.O. Quantity (in $)A. Design Team: Error or OmissionB. Owner: Scope ChangeC. GC/CMGC: Field (Unforeseen Conditions)

Project Name Project #Design

Team (E/O)Owner

(Scope)GC/CMGC

(Field)

Project A X-XXXXX-XX $450,000 $5,000 $4,500 $4,500 $14,000 3.11%Project B X-XXXXX-XX $4,750,000 $47,500 $40,000 $47,500 $135,000 2.84%Project C X-XXXXX-XX $300,000 $1,500 $1,500 $15,000 $18,000 6.00%Project D X-XXXXX-XX $2,500,000 $25,000 $50,000 $12,500 $87,500 3.50%Project E X-XXXXX-XX $450,000 $900 $9,000 $9,000 $18,900 4.20%Project F X-XXXXX-XX $20,000,000 $200,000 $100,000 $100,000 $400,000 2.00%Project G X-XXXXX-XX $100,000 $1,500 $5,000 $1,500 $8,000 8.00%Project H X-XXXXX-XX $1,500,000 $75,000 $5,000 $5,000 $85,000 5.67%

$30,050,000 $356,400 $215,000 $195,000 $766,400 2.55%46.50% 28.05% 25.44%

Total CO $% of

CO/CC

Insert new project above this row

TOTALS

PROJECT DESCRIPTIONConst Cost

CHANGE ORDER Categories



A. Categorize C.O.’s by Project’s Construction Cost (CC)

Less than $500K

More than $500K, Less than $2.5M

More than $2.5M, Less than $10M

More than $10M

CO % of Construction Cost(All Projects)

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Less than$500K

More than$500K, Lessthan $2.5M

More than$2.5M, Lessthan $10M

More than$10M

Project Costs

(CO

/CC

)


Analyze Results (Macro)

A. Problem? A. C.O. totals do not tell

the “total” story

A. Contingency

B. Additions vs. New

C. Design Schedule

D. E/O : too encompassing

E. Others???

CHANGE ORDER(% of Const Cost by Category)

Owner (Scope) 28.05%

GC/CMGC (Field) 25.44%

Design Team (E/O), 46.50%



A. Example A: Health Care Addition A. $10M Const Cost

A. $1M Contingency (10% of Const Cost)

B. Delivery: GC (Design-Bid-Build)C. Owner requests numerous scope changes

during constA. C.O.'s = $750K

D. Owner’s viewpoint: Successful A. Owner happy with project B. Added scope + $250K left in contingencyC. Hires EUA again

E. On paper: Unsuccessful A. 7.5% C.O.'s of Const Cost (more than EUA

benchmark)



A. Example B: New apartment building A. $10M Const Cost

A. $500K Contingency (5% of Const Cost)B. Delivery: CMGC (Design-GMP-Build)C. Error & Omissions + Field Issues

A. C.O.'s = $500K (adds)D. Owner “VE” interior finishes

A. C.O.'s = -$300K (deducts)E. Total C.O.'s = $200KF. Owner’s viewpoint: Unsuccessful

A. Owner unhappy with project B. VE finishes = Reduced SalesC. Never hires EUA again

G. On paper: Successful A. 2.0% C.O.'s of Const Cost (less than EUA benchmark)



A. Successful ProjectA. Profitable

A. EUA/Design TeamA. Minimal rework B. Where does profit evaporate:

A. CA PhaseB. OwnerC. GC & Subcontractors

B. Risk ManagementA. Minimal (no) litigation (by owner/GC)B. Minimal (no) claims (paid by design team)

C. Future WorkA. Referrals to other clientsB. Repeat work for that client


Collect Data (Micro)

A. Dissect the reasons WHY C.O.'s occurB. Collect more detailed C.O. informationC. C.O. Log

A. WHY? A. Identify cause of C.O.

B. WHO?A. Requests change: Design Team / Owner / GC

C. WHAT?A. Description of change

D. WHEN?A. Origination – Review – Sign-off

E. WHERE?A. By building system (Uniformat, BIM – future)


Collect Data (Micro)

A. C.O. Log (CA Log?)A. Format: Access or Excel?B. Related information (links?)

A. RFI (Request for Information) B. COR (Change Order Request)C. CB (Construction Bulletin)D. ASI (Architectural Supplemental Information)E. CCD (Construction Change Directive)

C. Semi-related information (links)A. Construction BudgetB. Contingency & AllowancesC. Pay Application

D. Non-related informationA. Submittals + Addendum


Analyze Results (Micro)

A. Important to EUAA. Continuous Improvement (staff, process, etc)B. Risk Management (reduce)C. Profitability (increase)

B. Important to Staff DevelopmentA. EUA Design Team involvement in project

A. PD (Pre-Design): DesignerB. SD-DD: PM & (1) support staffC. CD: PM, PAR, (2-3) support staffD. CA: PARE. PC (Post Construction)


Strategy of Improvement

A. Identify “problem” areasA. Example A:

A. 50% of C.O.'s are MEP Coordination issuesB. Fix: Improve “light table” process

B. Example B: A. 40% of Bldg System C.O.'s are B. Shell-related B. Fix: Focus in-house training sessions

B. Training of EUA Staff

C. Improve Project-Related Info MgmtA. Track issues during design processB. Connect decisions made during SD-DD-CD with

issues that occur during CA


Strategy of Improvement

PROJECT INFORMATION

CA LogCO’s

CB’s

PR’s

CCD’s

ASI’s

RFI’s

Others?

PROJECT SUMMARY

(per Vision's Info Cntr)

General

Location

Project Scope

Cost

Submittal Log

Code Check

PROGRAM

P.P.D.

Design Issues


Conclusion

Questions???

Comments???

Concerns???

Suggestions???


T H A N K Y O U

Monitoring & Reducing CHANGE ORDERS

PM : Change Orders

Design

Transcript of PM : Change Orders