Change order disputes and scope creep management
Definition
Construction projects frequently encounter scope changes mid-project: customer requests modifications, unforeseen conditions discovered, design adjustments, etc. Change order management creates friction: (1) Disputes over what constitutes chargeable scope vs. contractor responsibility, (2) Delays in change order approval (customer indecision), (3) Rework and schedule delays while change orders negotiated, (4) Scope creep (performed work not formally captured in change order), (5) Customer dissatisfaction with change costs. For construction managers, poor change order management results: (1) Unrecovered costs for scope additions (scope creep reduces margin), (2) Schedule delays during dispute resolution, (3) Customer relationship strain, (4) Legal/contract disputes if change order terms unclear. Studies suggest 5-15% of project costs impacted by change orders/scope management issues. For SMBs, this can represent significant margin erosion on already-tight-margin projects.
Key Findings
- Financial Impact: $100,000 - $400,000
- Frequency: on_majority_of_projects
Why This Matters
Change order management and documentation software, contract administration and scope management tools, dispute resolution and mediation services, customer communication platforms for change tracking, project baseline and variance management systems
Affected Stakeholders
Owner/Principal/Construction Manager, Project Manager / Operations Manager
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Critical shortage of skilled construction workers
Rapid escalation of direct labor costs and wages
Material cost volatility and inflation squeeze margins
High interest rates delay or kill project financing for customers
Hiring and deploying inexperienced workers creates safety and quality liabilities
Buy America Act compliance creates project delays and cost uncertainty
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