pm : change orders
TRANSCRIPT
04/18/23Eppstein Uhen Architects 1
Monitoring & Reducing CHANGE ORDERS
p r e s e n t a t i o n
04/18/23Eppstein Uhen Architects 2
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
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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
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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)
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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)
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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?
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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
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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
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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 $
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Collect Data (Macro)
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
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Collect Data (Macro)
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
)
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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%
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Analyze Results (Macro)
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)
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Analyze Results (Macro)
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)
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Analyze Results (Macro)
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
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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)
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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
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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)
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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
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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
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Conclusion
Questions???
Comments???
Concerns???
Suggestions???
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T H A N K Y O U
Monitoring & Reducing CHANGE ORDERS