Construction projects often look solid on paper. But put boots and equipment on the ground and suddenly — or, more often, gradually — the job can go soggy as additional, unanticipated work seeps into other tasks. Sometimes you can get paid for this additional work if the owner will sign off on a change order. However, as you likely know, this is easier said than done.
To avoid getting stuck with extra costs that undercut your profit margin, and to improve the chances you’ll be able to submit a viable change order, your construction company must excel at scope management. This has become even more important now that many jobs have been canceled because of the COVID-19 pandemic, while others may be far behind schedule after long delays.
Communicate and clarify
Optimal scope management starts in the preproject planning phase, which includes estimating and final bid submission. This is your chance to make sure everyone — from the owner to your team to anyone else involved — starts on the same page.
Begin with a clear discussion about what the owner wants vs. what you can deliver. Ideally, you can fulfill the demands of the job. But if you honestly believe you can’t, say so. Also talk about any plans for bringing in subcontractors and how their work might lead to complications or delays. Last, point out any foreseeable problems and explain how your change order process works.
Assuming you win the bid and a contract is drawn up, review it carefully — even if you’ve done a hundred other similar jobs. Ensure the terms are as specific as possible and that they’re compatible with the change order process you explained.
Watch out for the creep
During the contract performance phase, when the job is underway, someone needs to regularly compare the original estimate to current job cost status. For smaller construction companies, this might be you, the owner. For bigger ones, the project manager needs to be actively involved in scope management — including monitoring and controlling costs.
Doing so will give you an idea of where you stand on the budget, as well as help trigger and expedite the change order process should a major modification arise. Regular job status reports can serve as your first line of defense against events and circumstances that push you out of your comfort zone.
The goal is to prevent scope creep: the slow and unplanned mutation of a project at the hands of a series of small scope changes. Individually, these changes may seem harmless but, together, they can affect the execution and ultimate outcome of your project — even to the point of causing its failure.
Stick the landing
The third phase of scope management is completion. As your experience has likely shown, this is often when problems arise — when last-minute changes turn into long-running disputes.
So, rather than relax at this point, double your scope management efforts as you develop the punch list. One factor that often complicates the end of jobs is that the team members who were involved in the preproject planning phase have moved on to other projects. To the extent possible, bring them back on board for closeout, so you can ensure that everything you talked about in the beginning of the job has been (or is being) addressed at the end.
Beyond that, scope management comes down to all of the best practices that you’ve likely heard before. Communicate clearly with the owner. Document everything in writing, adding photos and video as necessary.
Evolve and adjust
Many contractors don’t think about project scope until something gets really out of whack. The truth is, it’s a full-time job that should begin before you even submit a bid. Be sure to keep an eye on your construction company’s performance in this area and fine tune as necessary.