Rework and Defects from Informal or Rushed Change Order Implementation
Definition
Industry guides stress that a verbal agreement is not a valid change order and that incomplete documentation of scope, drawings, and specs for changes leads to miscommunication in the field.[3][4][5] When crews perform changed work on unclear or outdated instructions, it often must be reworked, with contractors incurring additional labor and material costs that are difficult to recover.
Key Findings
- Financial Impact: Given change orders commonly total 10–15% of contract value, even a modest 5–10% rework rate on changed work can represent low‑ to mid‑six‑figure quality‑related costs on a $50M–$100M nonresidential project.[2][7]
- Frequency: Monthly
- Root Cause: Rushed approvals, incomplete detailing by designers, and lack of updated drawings or written directives result in field crews implementing changes incorrectly; because the formal change order often does not fully describe corrective details, associated rework and defects are treated as contractor risk instead of client‑funded scope.
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Nonresidential Building Construction.
Affected Stakeholders
Superintendent, Foreman, Quality Manager, Project Engineer, Architect/Engineer of Record
Deep Analysis (Premium)
Financial Impact
$100K-$250K. • $100K-$300K from 5-10% rework on change orders. • $100K-$300K in production downtime costs.
Current Workarounds
Email chains with attached PDFs; spreadsheet-based change order logs; paper T&M tags; handwritten field notes and photos; WhatsApp/SMS site communication; verbal approvals followed by informal implementation; manual RFI processes • Email PO changes, Excel tracking. • Email threads and shared Excel files for approvals.
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Unpriced and Late-Priced Change Orders Eroding Billable Revenue
Productivity Loss and Rework Costs from Poorly Managed Change Orders
Slow Change Order Approval Extending Time to Cash and Tying Up Working Capital
Administrative Burden of Change Order Pricing Consuming Estimating and PM Capacity
Disputes and Claims from Non‑Compliant Change Order Procedures on Public/Institutional Projects
Inflated or Opaque Change Order Pricing Enabling Abuse and Disputes
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