Being a contractor in the land development industry can be challenging to say the least. Not only do you have to manage your sub-contractors and your staff, sometimes you have to manage your consultants and owners too. When things are going well, managing these relationships is easy; but what happens when someone isn’t doing what they said they would do? What happens when it’s regarding a sizable change to a project and it starts affecting your cash flow? When dealing with change orders, your job is to get them approved as quickly as possible; ensure your company makes a profit while maintaining trust between you, the owners and the consultants of the project. Here’s a list of seven tips to follow, please let me know your thoughts!
Never, I mean NEVER get emotional.
This one may seem obvious but contractors can be known to be aggressive at times. After-all, it’s a demanding industry: long hours, labour shortages, hard work, high levels of detail and strict deadlines. Tensions may arise during negotiations or you may feel someone is being unfair or disrespectful; this is not the time to get flared up. If you are dealing with a difficult consultant or owner, it’s critical that you never get emotional, this destroys trust and will affect your future business negotiations.
Keep your calm, explain the situation, ensure you submit fair pricing that you can stand behind and remain assertive.
Meet in person with all stakeholders and make agreements.
For some reason or another, being face to face with all project stakeholders lowers tensions, ensures people are focused on the issues at hand and greatly helps promote action from all parties. Take this opportunity to make your case for the proposed change and explain all costs involved. At the end of the meeting, you want to ensure that everyone understands their appropriate action items (revised scope, revised quote, new drawings issued, change order created or change order signed) with reasonable deadlines. Ideally, these items are summarized in meeting minutes. When you get people to agree to deadlines in a group setting, they are more likely to comply; even more so if it’s in writing.
Lastly, make sure you follow through with what was asked of you and ensure it’s done before the deadline. If you don’t take the deadline seriously, why should the contract administrator or the owner?
Provide thorough quotations with lots of detail.
The more transparent your quote is, the easier it will be for the owners and consultants to approve. If they fully understand all the additional work involved in the change order, contract administrators are more willing and able to approve your quotations. However, if you send in a lump sum quote with little to no explanation, it could raise red flags and cause distrust; especially if the item is uncommon and they’ve never experienced it before.
Take the time to list all of the expected expenses the change order will incur, whether it’s labour, equipment, mobilizations, materials, management fees and profit.
Don’t throw the contract administrator under the bus.
Nobody is perfect, people make mistakes, even consultants. They may make a mistake on the issued for construction drawings, or on the tender form or simply not get back to you. If this is the case, whatever you do, you don’t want to find yourself in Karpman’s Triangle. One of the quickest ways to lower trust in a relationship is to speak negatively about a third party. If you speak bad about another colleague behind their back, why should you be trusted?
This can be avoided by not being a victim; not calling the client to look for a rescuer, and solve your own problems and obtain new agreements directly from the contract administrator.
Follow up without judgments.
if the agreed-upon deadline has passed and you are you are still waiting for your change order, you can send a gentle email reminder to the owner or consultant. Something like…
“Just wondering if you had a chance to finish that change order we discussed? Let me know if I can be of assistance with anything.
If emails go unanswered, make a phone call and leave a message if they don’t pick up. Make sure the tone of your phone call is without judgment, you want them to feel comfortable calling you back. If that doesn’t work, call again tomorrow and the next day, until you get your answer.
You know what they say, “the squeaky wheel gets the grease”. This doesn’t mean you have to be rude, it means you have to be persistent, they have to know that you are serious and your agreements should be respected.
Ask the client for help (as a last resort)
If you have a good relationship with the owner you can ask them for a favour. Without throwing the consultant under the bus (of course) you can gently ask the owner to help expedite the change order process. A call from the owner generally adds weight to any task.
Beware, do this sparingly (once a year for example), you don’t want to be seen as someone who can not manage your own relationships.
Make sure to show appreciation
Even if you find yourself waiting days for an answer, don’t let resentments get in the way of your manners when you finally get what you were looking for. Contract administrators are typically administering dozens of unit-priced contracts and projects, and your outstanding change order is only one of many items on their to-do lists. Be sure to appropriately show your thanks for the completed task, as it shows that you appreciate the time they took to do so.
Please let me know your thoughts. Did I forget any critical step? I’m curious to know.
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