Poerio Inc. | Industry Basics | Cost Management
If there’s one word that makes property owners nervous in construction, it’s “change order.” We understand — nobody likes unexpected costs. But change orders are a normal part of the construction process, and understanding how they work can take a lot of the anxiety out of them.
What Is a Change Order?
A change order is a written agreement between the owner and the contractor to modify the scope, cost, or schedule of the original contract. They happen for a variety of reasons: the owner decides to upgrade materials, the architect revises the design, unforeseen conditions are discovered during construction, or code requirements change.
Each change order should clearly describe what’s changing, how much it costs (or saves), and how it affects the schedule. Both parties sign it before the work is performed. That transparency is important — no one should be doing extra work without documentation and approval.
Why Change Orders Happen
On renovation projects, hidden conditions are the most common driver. You open a wall and find deteriorated framing, outdated wiring, or plumbing that doesn’t meet current code. No amount of planning can fully predict what’s behind existing walls and above existing ceilings.
On new construction, design changes and owner-requested additions are more common. Maybe you visit the site during framing and realize you want an additional office, or your equipment requirements change after the mechanical design is complete.
How to Minimize Them
The best way to minimize change orders is thorough preconstruction. Detailed plans, well-defined specifications, and careful coordination between the design team and the contractor will catch most issues before they become field problems.
For renovations, invest in existing conditions assessments. Selective demolition, environmental testing, and building scans can reveal a lot before full construction begins. It’s a small upfront cost that can prevent major surprises later.
Finally, make decisions on schedule. When owners delay selections on finishes, fixtures, and equipment, the construction team has to work around those unknowns, and last-minute decisions often create conflicts with work that’s already in place.
Our Approach at Poerio
We build contingency into our budgets because we know some change orders are inevitable. When they do arise, we document them clearly, price them fairly, and present them to you with full backup information. No surprises, no games. Our goal is to be a partner you trust, and trust starts with transparency.
————————————————————