This post was published to Online Education at 9:34:40 AM 12/11/2015

How changes affect projects?

Account Online Education

Changes are of two types.

Formal changes are evident. They have a big advantage to contractors. Contracting is tough. Not every
company can survive as a contractor. Contractor's bidding team spends huge resources in bagging an
order.

This change is a welcome sign. The contractor does not have to bid and bag the change order. The
conditions are known to the contractor.

But there are some important points here.

1. The contractor should accept the change from the Owner's Representative mentioned in the contract.

2. The change order should be kept in writing. The order value and work to be done should be clear.

3. The contractor should keep adequate records to prove that the work was done on time. The
contractor should also maintain a proper accounting to verify the money spent.

If these things do not happen, the contractor faces a risky situation. Also, the change order money has
to be realized in time.

Another type of changes is invisible, hidden. Contracts refer to them as constructive changes. The
contractor carries out work, but formal change order procedure is not followed. Reasons are improper
rejection, client comments, acceleration or deceleration etc. For example, a client makes changes in the
procurement plan of the contractor. The client insists that the quantity has not changed. If the
contractor incurs additional cost, then it is a constructive change.

As you will see from the post, both the changes can hurt a contractor. In short, they will hurt a project.