Managing Change Orders

This seminar will examine how changes in the scope of work on a project have become an inevitable part of the construction process.

CLASS DESCRIPTION
If handled improperly, changes can lead to disputes, mediation, and even litigation between you and the general contractor or the owner of the project. Project Managers must possess the Skills and strategies to deal with this most volatile of the project.

  • True cost of completing a change order
  • Establishing a change order process
  • Factors affecting Productivity
  • The Real Cost of Labor Burden
  • Negative Impacts on the base Contract
  • Contract Administration and Cost Accounting
  • Impacts to Schedule
  • Dealing with Fixed Overhead and Profit Mark-up
  • Presentation and Negotiation Skills
  • Effective Documentations

ABOUT THE INSTRUCTOR:
Kirk Alter has more that 30 years experience as a contractor and educator in the electrical and mechanical industries. He has worked his way through the industry as a Foreman, Superintendent, Project Manager, Estimator, Operations Manager, and Vice President of a $120M firm. Since 1995 Kirk has developed University level Undergraduate and Continuing Education Programs for electrical and mechanical contractors. Kirk has provided instruction for IEC chapters nationwide, ABC, and Purdue University.

Winning the Change Order Game 
A Kirk Alter Seminar 

Change orders cost your company money, damage the relationship between the customer and the contractor, and disrupt the progress of the job. Why then do we seem to feel that they, “are simply are normal part of every job?” They don’t have to be, and they shouldn’t be because they’re costing you time, focus and money.

This seminar focuses on using all the weapons available to regain the profits lost in doing change order work. The negative effects of change orders on the base work are studied and quantified. Participants are provided with a myriad of tools, practice and effective negotiation techniques designed to allow them to regain some of the ground that is lost during the change order process. Specific techniques are explored in capturing all your hidden costs, in improving your cash flow on changes and in executing all the terms of your contract with skills designed to maximize your ROI.

Change Orders are a game designed by owners to get more bang for their buck, and are caused: by architects and engineers who fail to accurately capture the owner’s intent, by owners who are unwilling to pay adequate design fees to get good construction documents; by general contractors who fail to keep rogue owners from constantly playing the “what-if” game during construction; and by sub-contractors who are too weak and intimidated to challenge this system so they resort to “padding” and misrepresenting their costs because they don’t understand how to truly identify all of them, and haven’t learned how to effectively negotiate in difficult situations.

This seminar will cure all of that. If after this seminar you don’t immediately recover all of your costs of attendance within a week or two you should ask for your money back. (You won’t get it, but you can always ask!!)

Change Order Seminar Outline

  1. The Genesis of Change Orders a. Bad construction documents.
    • Poorly written proposals.
    • Failure to prepare and provide a preliminary, but detailed and man-loaded schedule to the customer at bid time.
    • Failure to set clear expectations during contract negotiation and preconstruction.
    • Subservient attitude of sub-contractors and the failure to see a level playing field.
  2. It all starts with the contract…starting out with clear expectations for all.
    • Standard problem areas in contracts – solve the problems early.
    • Understand basic contract law, and what happens when one side wants a change.
    • Tools to generate prior to executing the contract to enhance your negotiating position when changes occur.
  3. Avoiding changes by managing expectations and carefully explaining consequences
    • The power of no.
    • Pre-selling your change order format to manage expectations. I
  4. The “Way it’s always been done,” – the pitfalls of traditional approaches to change orders
    • The cost of not understanding the economic consequences of your actions.
    • The culture of unintentional fraud, and how to avoid it.
    • Recognizing and capturing all of the true costs of changes.
  5. Finally, if you absolutely have to perform changes, how to properly estimate, propose, sell and defend your costs.
    • Cost identification & explanation.
    • Using industry standard tools to defuse “pseudo-experts” (CMs, Architects, Engineers, etc.)
  6. Hands-on Practical Exercise in recovering all of your costs, and effectively selling them to the customer.
  7. Using your successful change order tactics to convert traditional “plans & specs” customers into design build / design assist customers.

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