5 Steps to Keep Change Orders From Becoming Disputes

Spencer Krebs for Construction Dive

Subcontractors often must balance the demands of owners, government agencies and general contractors, all while trying to make a profit. 

But the construction industry is also rife with defects, change order disputes and project delays. When these issues arise, a subcontractor is often faced with the choice of “getting the work done” while trying to preserve the chance of “getting more work.” 

A single setback can create a domino effect leading to delayed payments, compounding costs and significant legal ramifications — consequences that are particularly challenging for subcontractors to navigate.

Change order disputes

One challenge subcontractors routinely face are change order disputes. 

Under almost all construction agreements, the change order process typically begins when either the owner, general contractor or subcontractor requests a change to the contract, scope of work and/or schedule. 

If the parties agree to the request, a formal written change order is prepared, and written authorization to perform the work is provided. The general contractor or subcontractor is then free to proceed with the new, agreed-upon work.

At least that’s what’s supposed to happen. 

Under field conditions, where issues arise unexpectedly, approval is often verbal, and there is pressure to remain on schedule. Contractors and subs often proceed without first securing written authorization from the owner. As a result, construction change orders are often the subject of litigation.

To read the rest of this story by attorney Spencer Krebbs on Construction Dive, our sister publication, click here.