Avoid Change Orders

Most contractors can have a reasonable idea of what a typical customer expects, so why do they spec it lower and give you an unreasonably low price?  Two words:  Change Order.  Change orders, while a perfectly legitimate instrument of contract modification, are the dishonest contractors’ tool to bring his profitability up and turn a loss for him into a gain.  I think back to a contractor some friends of mine had used to put an addition onto their home, and how they were shocked when, after the rough-in phase (so, bear studs, wiring, heating ducts, and plumbing, no insulation or drywall), the contractor said, “I’m done.”  Steve (name changed) was beside himself because the work was not done to his expectations, but sure enough, there wasn’t a clearly defined set of specs stipulating where the project ended.  The contractor knew that, so he played him.  You can imagine what Steve’s bargaining power was with that contractor when they sat down to discuss that change order and heard the pricey new cost involved… pretty dirty trick.  Why the change order tactic works for the dishonest contractor is because there is a legitimate additional cost associated with changing things mid-stream compared to doing it differently from the start.  Changes require re-work, ordering new material, slowing down other phases, bringing in different workers, or having to re-do any of the previous work, which translates into legitimate higher costs to the contractor, so you can’t simply use the change order practice or relative steepness in price as a means of spotting a dishonest contractor.  The fact is, change orders are expensive, so avoid them by planning and choosing well before work begins.  And have the discipline not to change things once work is underway.  If you have done enough planning and specified the job right, any changes you make mid-stream should not result in a significant enough gain for your project.  Be confident!  Guard against buyer’s remorse and stick to your original plan.

Tags: bid, Contractors, estimate, negotiating, price, scope, specs, undercut

This entry was posted on Tuesday, February 16th, 2010 at 4:32 pm and is filed under Construction, Contractors. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.