Scholarly Paper

Impacts of Change Orders on Cost and

Schedule Performance and the Correlation with
Project Size of DB Building Projects
Pramen P. Shrestha, Ph.D., P.E., M.ASCE 1; and Medya Fathi, S.M.ASCE 2
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Abstract: Few studies have been conducted to evaluate change orders in design-build (DB) projects, examining their impacts on cost and
schedule performance, and their relationship with project size. This study analyzed cost, schedule, and change order data for 125 DB building
projects to check whether the number of change orders for DB projects was higher than for design-bid-build (DBB) projects. All of the DB
projects considered in this study had fixed their final guaranteed maximum price (GMP) before the design was 100% completed. One of the
advantages of the DB delivery method is constructability, in which the designer can solicit feedback from construction personnel during the
design phase; this can reduce the number of change orders. Results indicated that there were fewer change orders during DB building projects
compared with DBB building projects. In addition, the percentage of projects that had cost overruns (21%) was significantly lower than that
for projects that had cost underruns or were completed on budget (79%). In addition, the percentage of change orders in projects that had
schedule overruns was not significantly higher than that in projects that had no schedule overruns; among other findings, the number of
change orders increased as the size of the project increased (r ¼ 0.59). DOI: 10.1061/(ASCE)LA.1943-4170.0000311. © 2019 American
Society of Civil Engineers.
Author keywords: Design-build; Building projects; Change orders; Cost overrun; Schedule overrun.

Introduction
The construction industry’s contribution to the development of
countries and its effect on economies (Mahamid et al. 2012) are
undeniable. The performance of a construction project is a deter-
mining factor in this regard, and can be affected by change orders.
Stakeholders in the construction industry commonly acknowledge
that change orders are inevitable (Günhan et al. 2007). In a complex
environment including many tasks, a limited schedule and budget,
and unforeseen conditions, accurate planning and prediction can
hardly be obtained (Wysocki and McGary 2003; Frame 2003;
Andersen et al. 2004; Stare 2010). Change orders occur regularly.
In other words, no matter how excellent the project plan is, there is
always a “surprise” during design and construction (Young 2000).
Several scholars have provided definitions for the term change
order and its concepts. In one of the initial attempts, Civitello
(1987) defined it as an unplanned change accompanied by extra
work—and subsequently cost and time—beyond expectations
(Civitello 1987). According to Barrie and Paulson (1992), any
alteration in the contract made by the owner is a change order.
A more holistic description considers a change order to be the ad-
dition of a new item, a deletion, and/or a modification of an existing
1
Professor, Dept. of Civil and Environmental Engineering, and
Construction, Howard R. Hughes College of Engineering, Univ. of Nevada,
Las Vegas, NV 89154 (corresponding author). ORCID: https://orcid.org
/0000-0001-6362-2315. Email: pramen.shrestha@unlv.edu
2
Ph.D. Candidate, Dept. of Civil and Environmental Engineering and
Construction, Howard R. Hughes College of Engineering, Univ. of Nevada,
Las Vegas, NV 89154. Email: medya.fathi@unlv.edu
Note. This manuscript was submitted on August 29, 2018; approved on
January 15, 2019; published online on May 28, 2019. Discussion period
open until October 28, 2019; separate discussions must be submitted for
individual papers. This paper is part of the Journal of Legal Affairs
and Dispute Resolution in Engineering and Construction, © ASCE,
ISSN 1943-4162.
item in the contract document (Scott 1999; Jackson 2004; Günhan
et al. 2007; Jawad et al. 2009; Ibbs 2012). Some studies define
change orders according to their specific case of examination, type
of contract, or type of project delivery. For instance, a change order
in a design-bid-build (DBB) building project might be related to a
variation after the detailed design (Shrestha and Zeleke 2018).
It is challenging to maintain the success of a project when facing
a change. Neither the owner nor the contractor is inclined to con-
tend with problems that preclude the project from meeting original
goals and expectations (Thomas and Napolitan 1995; Günhan et al.
2007; Ibbs 2012). It is implied that a change order’s impact on
a project refers to its negative effects on unchanged activities as
a result of a change in the contract (Hanna and Gunduz 2004).
Many studies have concluded that cost overrun is among
the detrimental effects (Nassar et al. 2005; Serag et al. 2010;
Anastasopoulos et al. 2010), leading to additional costs
(Ndihokubwayo and Haupt 2008; Günhan et al. 2007). However,
Ssegawa et al. (2002) claimed that not all types of change orders are
coupled with increased cost. In addition, indirect effects have been
recognized to increase costs, such as increased disputes, failure
in coordination of the project, reduced productivity, limited cash
flow, low morale, and float (Sun and Meng 2009). By means of
a “ripple effect” or “cumulative impact” (Lee et al. 2004), loss
in labor productivity has been considered an inevitable conse-
quence of change orders (Leonard 1988; Hanna et al. 1999a, b,
2002; Thomas and Napolitan 1995; Ibbs 2005; Moselhi et al.
2005; Halligan et al. 1994; Han et al. 2011).
The timing of a change order is also of great significance.
In general, more delays in a project cause more fatigue among
workers, which in turn can lead to impairment of productivity and
morale (Oglesby et al. 1989; Lee et al. 2005; Hanna et al. 2002;
Han et al. 2011). Change orders occurring later in the project
have more negative effects, and their level of severity can nullify
previous efforts (Han et al. 2011). Early recognition and action
regarding potential changes can provide opportunities to suggest

© ASCE 04519010-1 J. Leg. Aff. Dispute Resolut. Eng. Constr.

J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010

 remedies for potential problems and maintain adequate project
performance.
Design Build (DB) is a project delivery method to design and
construct a facility to be delivered by owners. It allows starting con-
struction before completion of the design. In recent studies, the au-
thors have compared the output and advantages of saving time and
cost by the use of two project delivery methods, DB DBB. DBB is
the traditional method, in which construction begins only after the
completion of a detailed design. Reviewing the literature revealed
that no study has been conducted to investigate whether change
orders lead to an escalation in the expenses and duration of projects
built using DB project delivery.
The study of change orders is critical because it has implications
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for legal issues as well as disputes on any project. If there are no
changes or few changes on a project, legal issues and disputes re-
lated to delay claims are reduced. On most projects, disputes occur
after the owners deviate from the original contract in terms of design
change, quantity variations, owner-initiated changes, or changes
due to unforeseen conditions. Sometimes these changes become
disputes and can go to litigation if the change orders are not man-
aged efficiently and appropriately (DeVries 2018). Therefore, it is
necessary to determine whether the project delivery method has any
impact on change orders in order to reduce disputes and litigations
between owners and contractors.
This study conducted a statistical analysis of change orders in
DB building projects and compared them with change orders in
DBB projects. In addition, analysis was conducted to determine
whether change orders have a detrimental effect on the schedules
for DB building projects, as was found for DBB building projects.
Finally, this study assessed whether there is any relationship be-
tween change orders and the size of a project in terms of project
costs for DB building projects. The main objectives of this study
were to
• Determine the percentage of change orders in DB projects and
compare that with DBB projects;
• Assess whether change orders significantly affect projects with
regard to cost overruns;
• Assess the relationship between change orders and the size of
DB building projects; and
• Determine whether change orders in projects that have schedule
overruns are significantly higher than change orders in projects
that have no schedule overruns.
Literature Review
The authors mainly reviewed the literature related to the impact of
change orders on productivity and loss of efficiency because it was
necessary to determine whether change orders are detrimental to
projects and can cause legal issues and disputes to arise between
owners and contractors. If the changes have a negative impact on
labor efficiency, then there is a higher probability that this can cre-
ate disputes between owners and the contractors, and sometimes
the disputes can move to court for litigation. Therefore, the impact
of change orders on labor efficiency needs to be explored in detail.
The authors also reviewed the literature related to the number of
change orders in various project delivery methods and contract
types, in order to determine which delivery methods and contract
types yield fewer change orders, so that disputes and litigations
between project parties can be reduced.
About two decades ago, among initial attempts to study change
orders in construction projects, Ibbs (1997) pinpointed a negative
correlation between the number of change orders (i.e., size) and
their effects, using standard statistical tests on quantitative data.
© ASCE 04519010-2
J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010
In order to assess the degradation of productivity and cost after
the occurrence of a change order, Ibbs developed a comprehensive
questionnaire survey with the help of other academic researchers
as well as members of the change management task force of the
Construction Industry Institute (CII), which included over 30 or-
ganizations and 104 projects having a total installed cost of greater
than $8 billion. The types of project included in the sample were
refinery, manufacturing, petroleum or natural gas, and chemicals
and were built mostly using DBB and DB, although they were not
limited to those methods. The various types of contract used in-
cluded lump sum, cost plus fixed fee, and cost plus percent fee.
In the end, it was concluded that, as a higher number of change
order occur, the worse the effect is on cost growth and productivity.
About three decades ago, scholars turned their attention to de-
creased labor efficiency. A study by Leonard (1988), considered the
first research effort in this field, formed the basis of many other
studies (Ibbs 2008, 2012). Another ground-breaking article by
Thomas and Napolitan (1995) related to daily productivity in three
industrial projects that occurred between 1989 and 1992. Based on
the output of variance tests and regression analyses for 522 work-
days, a 30% loss was observed as the average effect of all changes.
Nevertheless, individual changes did not necessarily correlate with
lower labor efficiency.
Hanna et al. (1999a) addressed the issue of lowered labor effi-
ciency in the mechanical construction industry. For this study, 61
projects were selected, consisting of commercial, institutional, in-
dustrial, residential, and the like. Most projects were DBB but some
were DB having lump-sum fixed-price contracts. For data collec-
tion, 26 contractors participated in questionnaire surveys and inter-
views. The input variables were the initial estimated labor hours
and measures for change orders, including estimated hours, num-
ber, timing, and effects. The findings showed that change orders
lowered labor efficiency, particularly when they were issued later
in the projects.
In addition, Hanna et al. (1999b) investigated labor efficiency in
the electrical construction industry. Focusing on macroeffects, this
research measured the effects of several factors on labor efficiency
at the project level instead of the activity level. A questionnaire was
developed; after a revision based on feedback by experts, it was
distributed randomly to 200 contractors in 10 states. Follow-up in-
terviews were conducted to validate the collected data. In total, 61
projects of various types were used for hypothesis testing and re-
gression analysis by means of independent variables, such as esti-
mated period of time for each change order. This model was later
validated by an additional questionnaire. The projects were fixed-
price or lump-sum and, as in Hanna et al. (1999a), they used mainly
DBB and some DB delivery. The results demonstrated direct links
among schedule compression, sequencing of activities, and change
orders.
The increasing need for school buildings and the substantial
number of change orders they involve has become a challenge
in major school districts throughout the United States. Dealing with
this issue, Günhan et al. (2007) investigated the causes and mag-
nitude of change orders during the construction and renovation of
school buildings during the period 1999–2004. Over 6,500 change
orders were evaluated based on the amount of the contract award,
cost of the changes, and project completion. The changes were cat-
egorized into five groups, such as owner-directed changes and
errors/omissions in the contract documents. The study emphasized
that it was possible to limit the costs related to change orders to 5%
of the contract value by taking some precautionary measures—for
example, presenting an early definite scope and having effective
management prior to the contract.
J. Leg. Aff. Dispute Resolut. Eng. Constr.
 Adverse effects of change orders have been studied by many
researchers. Ndihokubwayo and Haupt (2008) discussed how cost,
time, quality, health and safety, and professional relations costs
can affect project performance. However, their main focus was
the effect on waste, as indicated by cost. They studied two residen-
tial and shopping apartment complexes in Cape Town, South
Africa, and found that some unnecessary costs could not be com-
pletely mitigated, such as resource waste, as well as the contribu-
tion of unnecessary costs to the final delivery cost. Another study
reviewed methods for quantifying lost productivity and assessed
the relationship among changes, productivity losses, contributing
parties, and disruptions. Ibbs et al. (2007) observed that a single
factor could hardly cause a decline in productivity; instead, a num-
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ber of causes played simultaneous roles. This group reviewed a va-
riety of estimating methods for lost productivity, such as project
practice–based methods (e.g., baseline productivity and earned
value analysis) and industry-based or cost-based methods, since
specific circumstances required the most suitable analysis method
to resolve the problem.
Combining individual sets of projects presented by Leonard
(1988) and Ibbs (2005, 2008), Ibbs (2012) followed the same ob-
jectives and examined the effects on labor productivity, supporting
the previous conclusions regarding productivity. Using a larger data
set [i.e., combining the databases of Leonard (1988) and Ibbs
(2005, 2008)], Ibbs (2012) quantified the likelihood, number,
and effect of change orders on project cost, schedule, and produc-
tivity. This study included a series of statistical tests not addressed
before, and detected an analogous relationship between productiv-
ity, cost and schedule overruns, and the likelihood and severity of
changes. The results showed that a greater number of changes
deteriorated productivity and its predictability. Compared with pre-
vious reports, the study found a greater ratio of final to estimated
project costs and more frequent cumulative effects. Also, with less
than a 5% change, more than half of the projects experienced a
higher productivity rate than had been planned; however, when
change orders increased fourfold, the planned productivity rate
could not be achieved.
Subjective assessments to identify a project affected by change
orders underlie the need for a clear and quantitative definition of
their effects. To fulfill this need, Hanna et al. (2002) proposed a
classified measurement to determine whether electrical or mechani-
cal projects, as labor-intensive environments, were affected or un-
affected by change orders. In this study, CII members contributed to
the development of a questionnaire. For 116 projects, 35 electrical
contractors and 33 mechanical contractors responded that 59 and
57 projects, respectively, were successful in meeting the limits of
the model. The project types were commercial, industrial, institu-
tional, manufacturing, residential, power plant, and wastewater.
The collected data were analyzed by logistic regression, and cross-
validation was used to validate the developed model. The researchers
claimed that the model could be considered a forecasting tool to
predict whether or not a project was affected by change orders
based on eight primary factors, including percent change, estimated
and actual peak manpower, change timing, and overtime.
Hanna and Gunduz (2004) believed that small projects in gen-
eral were more likely to be affected by changes due to the lack of
accurate planning for labor and costs during the design and con-
struction phases. That being said, small electrical and mechanical
projects were selected to investigate the detrimental effects of
change orders on overall productivity. A CII committee took part
in developing the questionnaire and conducting data collection,
which was based on causative factors. In total, 34 projects having
less than 5,000 estimated work hours were selected and used in a
linear regression equation to reach the value of delta, which was the
© ASCE
J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010
difference between the summation of the estimated base, change
orders hours, and actual hours. In the final model, the principal var-
iables leading to disruptions and loss of labor efficiency included
percentage of design-related and owner-related changes, ratio of
actual to estimated peak labor, project duration, and percentage of
work hours of the project manager.
Focusing on large buildings, Jawad et al. (2009) carried out a
questionnaire survey to determine the causes and effects of change
orders, as well as to identify control measures for managing change
orders. In this investigation, 34 contractors and consultants, each
with over 15 years’ experience, responded to questions on general
market characteristics and trends, causes and effects of change or-
ders, and management control tools. The common contract format
among the projects was lump-sum turnkey. The output indicated
that the cost overrun was 5%–10% of the original contract value,
while the schedule overrun was less than 10% of the original
contract duration. According to this study, the owner was the chief
source of change orders and the primary cause was plan changes
by the owner.
Communication among the parties involved in the occurrence of
change orders in various phases of a project can be problematic;
this is true even for reasonable change orders if they cause the
project to exceed contract expectations. Among attempts to quan-
tify the possible effects of change orders on project performance,
Yitmen and Soujeri (2010) used an artificial neural network (ANN)
to determine potential dispute resolutions between a client and
a contractor. Using certain factors, ANN identified the negative
effects and the probability of a dispute occurring. The selected proj-
ects were 29 buildings and 6 infrastructures constructed in North
Cyprus, with an original total value above $90 million. One of the
drawbacks of this study is that the authors selected various types of
projects from buildings to roads to water/wastewater.
Effective change management can help a project meet its origi-
nal goals with no disputes or waste of time and money. The pre-
vention of change orders and the reduction in their effects on
project performance by means of comprehensive management
was the subject of close scrutiny by Stare (2010). The model de-
veloped in this study took advantage of combining risk manage-
ment and project control with change management to detect
changes early, have suitable reactions, lower the potential effects
of change, and implement changes properly. By means of a web
survey of about 1,000 construction professionals in Slovenia,
137 respondents indicated that change orders in 90% of projects
caused them to exceed their estimated time and costs.
Alnuaimi et al. (2010) found that change orders and disputes
increased the cost and duration of projects. This group analyzed
four public construction projects in Oman and showed that the par-
ties that benefited the most from change orders were the contrac-
tors. However, consultants were also beneficiaries because of low
risks and guaranteed payment from change orders.
Shrestha and Zeleke (2018) examined the effects of change or-
ders in school building renovation projects in the Las Vegas Valley
in southern Nevada. In this study, 161 projects were analyzed to
quantify change orders and evaluate their effects on project perfor-
mance. The researchers determined the change orders that affected
cost and time overruns to a greater extent and correlated the number
of change orders with project size. Most change orders were due to
unforeseen conditions and design rather than owners. Regarding
the detrimental effects on project performance, the projects expe-
rienced 75% cost overruns and 40% schedule overruns.
A number of studies have been conducted to compare construc-
tion cost change in various project delivery methods (e.g., DBB,
DB) and construction manager at risk (CMAR) in building projects
(Konchar and Sanvido 1998; DBIA 2018; Shrestha and Fernane
04519010-3 J. Leg. Aff. Dispute Resolut. Eng. Constr.
 2017). However, the study most relevant to the work described in
this paper is the one conducted by Rojas and Kell (2008) on school
building projects. This study’s findings on the cost performance of
CMAR compared with DBB in building projects were exactly the
opposite of what most other studies found. Roja and Kell collected
297 school building projects from Washington and Oregon and
found no significant difference in the construction change order
costs of CMAR and DBB projects. They also showed that the cost
growth of CMAR projects was significantly higher than that of
DBB projects during buyout (Rojas and Kell 2008).
Reviewing the literature revealed that, although many attempts
have been made to determine the effects of change orders on cost,
schedule, and productivity, previous studies investigated these
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issues only in DBB building projects Recently the authors found
that the owners received significantly higher schedule advantage
than cost advantage in DB building projects (Fathi and Shrestha
2018). The current study focused on DB building projects, a meth-
odology used to increase collaboration between owners and build-
ers in order to reduce the number of change orders and their effects
on productivity and schedules. Additionally, most previous studies
focused on contributing factors as well as improving strategies and
management styles. Therefore, to fill the knowledge gap, this study
quantified change orders in DB building projects and analyzed their
relationships with schedules and project sizes. The objective was to
determine whether the DB delivery method yields fewer change
orders when compared with DBB, which is one of the premises
for using the DB delivery method when designing and constructing
projects.
Research Methodology
The authors collected DB building project change order, cost, and
schedule data . The projects were categorized as schools and cam-
puses, offices and commercial buildings, and clinics and hospitals.
School and campus buildings generally consist of classrooms, labs,
libraries, and the like, constructed for school districts or for univer-
sities and community colleges. These data were collected from the
database of the Design Build Institute of America (DBIA).
After collection, the data were verified and checked for consis-
tency. The data were screened, and general descriptive statistics
were analyzed. The data were used for statistical analysis to deter-
mine the correlation coefficient, as well as to determine whether
change orders were significantly different in two types of project,
categorized based on schedule overrun and project size. Chi-square,
Pearson’s correlation coefficient and t-tests were used to confirm
the research hypothesis. The research and null hypotheses and the
statistical analyses conducted in this study are described next.
Research Hypothesis
Four research hypotheses were created in this study. The first stated
that there is a lower percentage of change orders in DB building
projects compared with DBB projects. The second was related
to the effects of change orders on cost overruns in DB projects,
stating that the number of DB projects that have positive change
orders is higher than the number of projects that have negative
or no change orders. The third research hypothesis stated that
change orders have detrimental effects on the schedule growth
of these projects. The final research hypothesis stated that the num-
ber of change orders has a significant positive correlation with the
contract costs of DB projects, similar to that found in DBB projects.
All of these research hypotheses, except the first one, were con-
verted to null hypotheses to conduct statistical tests for validation.
To prove the first research hypothesis, the authors used the findings
© ASCE
J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010
of previous studies on the percentage of change orders in DBB
building projects to compare with the percentage of change orders
in DB building projects from the data collected in this study.
Null Hypotheses
To test the second research hypothesis, it was converted to a null
hypothesis. The null hypothesis stated that there is no significant
difference between the percentage of projects with positive change
orders compared with projects that have no or negative change
orders. This would show whether there are a significantly higher
number of DB projects that have cost overruns than the number
of projects that have cost underruns.
The null hypothesis for the third research hypothesis stated that
there is no significant difference between change order percentages
in the projects that have schedule overruns compared with projects
that have no schedule overruns. It can be mathematically expressed
as follows: the difference in the population means of change order
percentages of the two project groups is not significantly different
from zero as expressed as shown in Eq. (1)
μchange orders in DB projects with schedule overruns
¼ μchange orders in of DB projects with no schedule overruns ð1Þ
The fourth null hypothesis stated that there is no significant cor-
relation between the number of change orders and contract costs of
DB building projects. Alternatively, it can be stated that the corre-
lation coefficient between the number of change orders and the size
of a DB building project is not significantly different from zero.
It can be expressed as shown in Eq. (2)
ρchange orders and project contract cost ¼ 0 ð2Þ
Data Collection
For this study, the data from 125 DB buildings were collected from
the DBIA database from September 2017 to May 2018. The sample
contains three groups: schools and campuses (57%), offices and
commercial buildings (22%), and clinics and hospitals (21%).
The following information from the projects was gathered:
• Project’s location, size, procurement/selection criteria (mostly
best value), and design-build contract terms (mainly lump sum
and guaranteed maximum price);
• Change order data: total number of change orders in the project;
• Cost data: contracted project costs and actual total project
costs; and
• Schedule data: notice to proceed (NTP), bid/contracted con-
struction start and completion dates, actual construction start
and completion dates, contract bid duration, and actual duration.
These data were used to developed two major metrics: one re-
lated to change orders and the other related to schedule growth.
Eqs. (3) and (4) show how these metrics were calculated. The au-
thors did not use the cost growth metric in this study because total
project completion cost was not available. However, for consis-
tency, the author show the cost growth metric generally used in
research in Eq. (5)
Total change order cost
Change order ð%Þ ¼ × 100 ð3Þ
Total contract cost
Schedule growth ð%Þ
Total actual duration − total contract bid duration
¼ ð4Þ
Total contract bid duration
04519010-4 J. Leg. Aff. Dispute Resolut. Eng. Constr.
 Total completion cost − total contract cost
Cost Growth ð%Þ ¼
Total contract cost
ð5Þ
Statistical Tests
Before analyzing the data, boxplots of change order numbers and
percentages were prepared to determine whether there were outliers
in the data. If so, they were removed. An outlier is generally defined
as a data point “which falls more than 1.5 times the interquartile
range above the third quartile or below the first quartile” (Wolfram
MathWorld 2018).
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assumption, related to equal variances in both groups, was tested by
conducting Levene’s test. If this test failed, it would show that
the variances were unequal in these two groups. Then a t-test with
unequal variances would be conducted to determine whether the
change order percentages in these two groups of projects were sig-
nificantly different.
Pearson’s Correlation Test
Pearson’s correlation test was conducted to determine the correla-
tion of change order numbers with project contract costs. To con-
duct this test, four major assumptions had to be verified: (1) the data
would be in interval or ratio scale; (2) no significant outliers would
be present in the data set; (3) the data would be normally distrib-

Chi-square, Pearson’s correlation, and t-tests were conducted to
test whether the null hypotheses were true. Chi-square tests were
conducted to determine whether the percentage of projects that had
positive change orders was significantly higher than the percentage
of projects that had no/negative change orders. Pearson’s correla-
tion tests were conducted to check for a significant correlation be-
tween change order percentages and schedule growth. To determine
whether the size of projects that had no/negative change orders
were significantly larger than projects that had positive change or-
ders, t-tests were conducted. These tests and their assumptions are
described next.
uted; and (4) the data set would have a linear correlation (Laerd
Statistics 2018b). The first assumption was true because both
the change order percentages and project contract cost data were
on ratio scales. The outliers were identified and removed before
the data were analyzed. Normality was tested by Pearson’s corre-
lation test. The final assumption related to linearity was tested by a
scatterplot of change order numbers and project contract costs. The
plot showed whether these two variables had linear relationships.
Results

Chi-Square Test
The chi-square test was conducted to determine if there was any
significant difference between the percentage of projects that
had no/ negative change orders and the percentage of projects that
had positive change orders (Statistics Solutions 2018). In this study,
the authors investigated whether change orders have significant det-
rimental effects on DB building projects in terms of cost overruns.
There were three assumptions to be met: (1) the data would be ran-
domly selected; (2) the variable under study would be a categorical
variable; and (3) the expected value of the number of sample ob-
servations in each level of the variable would be at least 5 (Star Trek
2018). Based on the randomly selected projects collected from the
DBIA database, the first assumption held true. Similarly, the var-
iable used in this study to test was percentage of projects, which
was a categorical variable. Also, the sample size of each of these
two groups was more than 5. Therefore, all three assumptions were
true in this sample and so this test was conducted to determine
whether the second null hypothesis would hold true. The test was
conducted at alpha level 0.05. If the p-value was found to be less
than 0.05, then the null hypothesis would be rejected, confirming
that change orders significantly affect DB building projects in cost
overrun.
In order to determine whether the data had any outliers, a boxplot of
change order percentages was prepared using SPSS, as shown in
Fig. 1. From the boxplot, it can be seen that 10 data points were
considered outliers. Therefore, before analyzing the data, these 10
data points were removed. The remaining 115 data sets were used
to determine the descriptive statistics and to conduct statistical
analyses to prove the research hypotheses. These are described in
detail in the following subsections.
Descriptive Statistics
Descriptive statistics were calculated for the number of change
orders, percentage of change orders, schedule growth, and contract
costs of DB building projects. The project data collected in this sam-
ple were taken from different time periods; therefore, change order
costs and contract project costs were normalized using the cost
indices from the RS Mean Cost Guide (2018). All cost data were
converted to January 2018 equivalent costs using these indices.

t-Test
The t-tests were conducted to determine whether the change order
numbers and percentages in DB building projects completed on
time or ahead of time were significantly lower than those in projects
that took more than the contracted time to complete. To conduct
this test, six assumptions had to be verified: (1) dependent variables
would be in continuous scale; (2) there would be two independent
groups; (3) the data would be randomly selected; (4) there would
not be any significant outliers present in the data set; (5) the de-
pendent variables would be normally distributed; and (6) the homo-
geneity of variances in these two groups would be equal (Laerd
Statistics 2018a). The first three assumptions held true in this sam-
ple. The fourth assumption had already been tested and verified
before the data were analyzed. For testing normality, “the residual
of regression should follow a normal distribution” (Laerd Statistics
Fig. 1. Boxplot of the percentage of change orders in DB building
2018a). Therefore, a normal predicted probability (P-P) plot was
projects.
checked to see whether the data were normally distributed. The last

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Downloaded from ascelibrary.org by Nottingham Trent University on 08/07/19. Copyright ASCE. For personal use only; all rights reserved.

Fig. 2. Mean and median values of the percentage of change orders and schedule growth in DB projects.

Table 1. Results of chi-square test

Percentage of Chi-square
DB project types based on cost growth No. of projects projects value p-value
With cost underrun or completed on budget 91 79 39.03 0.000a
With cost overrun 24 21 — —
Total 115 100 — —
a
Significant at alpha level 0.05.

Fig. 2 shows the mean and median values of the percentage of
change orders and schedule growth. It can be seen that the average
percentage in change orders for DB building projects was 4.04%
and the median value was similar to the mean value. About 50% of
the projects had no schedule growth, and the average value of
schedule growth was −1.4%. The average size of the DB building
projects was $84.4 million, equivalent to a 2018 base cost.
The analysis showed that the mean value of change order costs
was about $3.04 million and the median value was $4.29 million.
The average DB project size considered in this study was about
$84.42 million. A statistical test was conducted to determine
whether the number of projects having cost overruns was signifi-
cantly higher than the number of projects having no cost overruns.
The results of this test are described in the following section.
had no schedule overruns, the assumptions of data normality
and equal variances in these two groups of projects needed to
be tested. The normality assumption of the data was tested by pre-
paring a P-P plot using SPSS. Fig. 3 shows the P-P plot of regres-
sion standardized residual for change order costs of sample DB
building projects. The normal P-P plot did not show that the data
were normally distributed. However, based on the central limit
theorem, the data were considered normally distributed if the
sample size exceeded 30. In this case, the sample size was 115;

Chi-Square Test Results

The chi-square test showed whether the percentage of projects that
had cost overruns was significantly higher than the percentage of
projects that had cost underruns or no cost overruns. The data
analysis indicated that there were 91 (79%) projects that had no
cost overruns or cost underruns. The remaining 24 projects (21%)
had cost overruns. The chi-Square test results showed that, in the
population, the number of cost-overrun DB projects was signifi-
cantly lower than the number of cost-underrun or no-cost-overrun
projects because the p-value found in the test was less than 0.05
(Table 1). Therefore, it can be stated that, the use of DB project
delivery in designing and constructing building projects reduces
cost overruns in terms of number of projects.

t-test Results
Before conducting a T-test to determine whether the change order
percentages of projects that had schedule overruns were signifi-
Fig. 3. Normal P-P plot of change order costs in DB building projects.
cantly higher than the change order percentages of projects that

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J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010

 Table 2. Results of Levene’s test Table 4. Results of Pearson’s correlation test
Sample Levene’s Independent Sample Correlation
Group size Variances statistic p-value Dependent variable variable size coefficient p-value
Projects with schedule overrun 91 48.57 0.05 0.83 Change order cost Total contract cost 115 0.59 0.001a
Projects with no schedule overrun 24 36.0 — — a
Significant at alpha level 0.05.

Table 3. Results of t-test with equal variances are random and that schedule overruns have no correlation with
Mean change order percentages.
Sample change
Group size order (%) t-statistic p-value Pearson’s Correlation Test Results
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Projects with schedule overrun 91 3.5 −1.66 0.10
Projects with no schedule overrun 24 6.0 — —
therefore, it could be considered that the data were normally dis-
tributed. According to Bartlett (2018), “as the sample size in the
two groups gets large, the t-test is valid (i.e., the type 1 error rate
is controlled at 5%) even when data doesn’t follow normal
distribution.”
The final assumption of the t-test was that the variances of the
two groups were equal. In this test, the two groups considered were
projects that had schedule overruns and the projects that had no
schedule overruns. Levene’s test was conducted to verify this
assumption; the results are provided in Table 2. The null hypothesis
of the test was that the two groups had equal variances. If the
p-value was less than 0.05, then the null hypothesis was rejected,
showing that the groups had unequal variances. The results showed
that these two groups had equal variances because the p-value was
greater than 0.05 and failed to reject the null hypothesis.
A t-test with equal variances was conducted to determine the
difference in change order percentages between the two project
groups. The results of this test are provided in Table 3, which
indicates that the change order percentages were not significantly
different. This proved that change orders in DB building projects
Pearson’s correlation test was conducted on change order percent-
ages and total contract costs of DB projects to see whether they
were linearly correlated. Before conducting this test, the assump-
tions related to linearity and normality were checked. First, a scat-
terplot was created to see whether there was a linear correlation
between these two variables, as shown in Fig. 4. From the plot,
it can be seen there was indeed linearity.
The result of Pearson’s correlation test is provided in Table 4.
It shows that there was good positive linear correlation (0.59)
between the two variables and that the correlation was significant
at alpha level 0.05. Therefore, it can be stated that, as the total
contact cost of DB project increases, the change order cost
increases.
Discussion
The study results show that the average value of change orders in
DB building projects was 4.04%. In this study, the majority of the
data collected were from school and campus buildings. When the
change orders of this DB data sample were compared with those for
DB campus buildings studied previously by the authors, they were
found to be fewer (16%) (Shrestha and Fernane 2017). In addition,
the change orders for this set of DB building projects were found to
be fewer than the change orders for DBB campus (11.5%) and

Fig. 4. Scatterplot of change order cost and total contract cost in DB building projects.

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J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010

 school building (5.9%) projects reported by Shrestha and Fernane
(2017) and Shrestha et al. (2018). Therefore, it can be concluded
that the number of change orders in DB building projects is fewer
than that in DBB building projects. A study conducted by Perkins
(2010) on Military Construction (MILICON) projects supports this
conclusion, showing that DB family housing projects also had
fewer change orders than DBB family housing projects. These con-
clusions were derived based on the numbers without conducting
the statistical test.
Another important finding of this study was that change orders
caused a significantly fewer number of projects to have cost over-
runs. It was found that change orders increased costs in only 21% of
the building projects. This was significantly lower compared with
Downloaded from ascelibrary.org by Nottingham Trent University on 08/07/19. Copyright ASCE. For personal use only; all rights reserved.
the percentages of projects that were completed on budget or under
budget (79%). This finding shows that DB delivery has less impact
on building projects in terms of cost overruns. It differs from DBB
building project findings, in which a higher number of projects
(42%) have cost overruns due to change orders (Ibbs 2012).
The third major finding of this study was that change orders do
not have a significant impact on schedule overruns in DB building
projects. Average schedule overruns for the entire data set of
DB building projects were found to be a negative 1.4%, which
is impressive. Additionally, when change orders in projects with
schedule overruns were compared with those in projects with no
schedule overruns, no significant difference was found. This shows
that change orders have no impact on schedule performance in DB
building projects, which is exactly opposite to what was found for
DBB building projects in the studies by Shrestha et al. (2018) and
Shrestha and Zeleke (2018). The authors found that, in DBB ren-
ovation and new school building projects, change orders have sig-
nificantly detrimental effects on schedule overruns. However, in
DB building projects, this is not the case. Therefore, it can be as-
sumed that, even when there are change orders in DB projects, the
design-builders manage the changes as they phase from design to
construction. Because in the DB delivery method design and con-
struction are carried out by one entity, there is flexibility in man-
aging changes in such a way that they have no effect on project
completion time.
The final finding of this study was a strong and significant pos-
itive correlation between change order numbers and total contract
costs in DB building projects. The results show that change orders
increase as project size increases. Therefore, a large DB building
project owner and design-builder must consider an appropriate
change order management system in order to reduce impacts on
costs and schedules. This finding is similar to what was found
in DBB building renovation projects (Shrestha and Haileab 2018)
and transportation projects (Hinze et al. 1992; Anastasopoulos et al.
2010). It shows that the change management process is very im-
portant in large DB and DBB projects because both have high num-
bers of change orders. Contract administrators of large DB and
DBB projects need to be vigilant during the change management
process so that change orders will not have ripple effects, creating
disputes and litigation between project participants.
Conclusions
Change orders, their impact on cost and schedule performance, and
their correlation with project size, especially in DB building proj-
ects, were examined comprehensively in this study. Due to a lack of
literature on change orders in DB building projects, the findings
here have immense importance for owners and design-builders
who have recently started using DB delivery . One finding related
to the relationship between change orders and project size is that
© ASCE 04519010-8
J. Leg. Aff. Dispute Resolut. Eng. Constr., 2019, 11(3): 04519010
DB projects are similar to DBB projects. However, findings related
to the impact of change orders on cost and schedule performance
indicate that DB and DBB projects are diametrically opposed. This
study found that change orders have a significantly lower effect on
DB project cost performance and no effect on DB schedule perfor-
mance, which is not the case with DBB projects. Also, in terms of
change order performance, it was found that DB building projects
have fewer change orders when compared with DBB building proj-
ects. Therefore, it can be stated that DB is a better project delivery
method than DBB in terms of generation of change orders and im-
pact on cost and schedule overruns.
The major contribution of this study to the body of knowledge is
the light it sheds on change order performance and its impact on
cost and schedule performance in DB building projects. The prac-
tical implications of this study’s findings are that owners should
consider the advantages of DB delivery in terms of fewer change
orders and no impact on schedule when developing new projects.
However, it should be noted that change orders need to be con-
trolled on large DB building projects so that they have no effect
on cost and schedule performance. It was found that large DB proj-
ects tend to have more change orders when compared with small
DB projects. The authors recommend conducting a similar study on
highway and infrastructure projects. Further, the authors recom-
mend conducting studies to determine the various types of change
orders in DB building projects, as well as to determine which major
change orders affect DB cost and schedule performance.
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