Design changes impact on construction project performance in many ways. Some of the most common impacts are cost overrun, time overrun, and quality problem.
Design errors and omissions, although preventable, accounted for construction contract costs increases of about 2.9 percent. They also contribute to project delays and extension of construction timelines.
Accuracy
Inaccurate construction estimates can lead to lost revenue, missed opportunities, and even lawsuits. This is why it’s important to track job costs on every project and compare them to your estimates, especially after you perform a site visit or pre-bid meeting. It’s also vital to make sure that the experts on your team are working with up-to-date and reliable information plugged into a top-of-the-line design program like Vertex BD.
Materials are one of the hardest types of costs to accurately estimate. Prices for building products can change dramatically from the time the project begins to the time that construction starts. This can be due to changes in demand, supply, and even tariffs. It’s best to establish relationships with your suppliers and manufacturers to get the most up-to-date price data.
Lastly, site conditions can differ greatly from location to location. A site visit can help you identify hidden environmental existing conditions that could impact the project. These could include buried gasoline stations, dry cleaners, old landfills and waste systems, abandoned cemeteries, and even asbestos. Failure to address these potential issues will result in costly delays, which can cost contractors money and lose them clients.
Ultimately, you need to do everything possible to keep your estimates accurate, including making sure the experts on your team are tracking job costs and performing a site visit or pre-bid meeting before they begin work. This will ensure that your final project budget is as close to the original estimate as possible.
Time
The time needed to complete a project is a crucial factor in determining the overall cost of a construction project. The longer a project takes, the more it will cost and the less likely it is to be completed on schedule. A common method for estimating project completion is to use subjective judgments of percentage complete. However, this method can be biased by optimism, pessimism or inaccurate observations, and requires a skilled team of estimators.
Oftentimes, a construction project will experience changes in the original plans due to design errors or unforeseen site conditions. These change orders will need to be reflected in the budget and timeline for the project. In many cases, this can result in an increase of up to 3 percent of the construction contract costs.
One of the main reasons for this is a lack of communication between the design and construction teams. Design software can help reduce this problem by ensuring that all members of the team are on the same page and have access to the same information.
Extensive literature has acknowledged that design changes are the primary contributor to disruption of construction projects performance, especially in terms of time and cost. This study seeks to establish the relationship between the causes of these changes and their impact using a fuzzy fault tree analysis.
Change Orders
When change orders are needed, they need to be addressed quickly and effectively. Otherwise, delays ensue and costs skyrocket. Change orders can affect every aspect of the project, from labor to materials. Whether the change is big or small, it’s vital that the new scope of work is clearly defined. Without clear parameters, disputes will arise, which can lead to bad blood between project stakeholders and possibly a breach of contract.
A change order is a request to amend the contract to include additional tasks, specs, or requirements not included in the original estimate. These changes can be caused by site conditions that differ from what was depicted in the initial design, or a client request for additional features.
While research acknowledges the impact of change orders on contractor cost performance, studies have not consistently analyzed the causes and effects of them. This study attempts to fill in the gaps by replicating previous empirically-based research on 98 construction projects.
To reduce the number of change orders, you can adopt best practices to make sure all stakeholders are on the same page regarding the work needed. This may include collaborating through takeoff and estimating software, regular meetings to discuss the project schedule with clients, or using third-party audits to ensure all documentation is up to date. It’s also important to communicate with stakeholders regularly throughout the project to avoid misunderstandings that can lead to misallocations.
Risk
Typically, construction estimates require the use of historical cost data. However, such data can be misleading if it is not used with a certain degree of caution. It must also be updated in a timely manner to reflect changes that inevitably occur. Furthermore, historical cost data should be based on unit costs rather than on relative prices. The latter introduces the possibility that a change in relative prices may result in a different amount being required to accomplish a particular task.
The third largest cause of cost overruns on projects is design errors and omissions. It is estimated that these account for about 22 percent of all increase in contract costs. Other major causes include unforeseen site conditions and changes to project scope or specifications.
The fourth biggest cause of cost overruns is a delay in the start-up of the project due to insufficient subcontractor qualifications. This problem can be solved by taking steps to ensure that the right subcontractors are qualified before they receive the contract. This can be done by using fast, easy-to-use digital solutions that streamline qualification processes such as trade history, safety record and financial benchmarking. By doing so, the likelihood of significant cost overruns on a project is significantly reduced. Historically, risks were perceived to be external threats to human well-being caused by natural disasters or other environmental factors. However, modern societies are also exposed to risks produced internally by the very process of pursuing economic growth and development.