This document outlines a process to monitor and reduce change orders on construction projects. It involves collecting data on historical change orders, analyzing that data to identify trends, and then collecting more detailed change order information to determine the causes. This will help identify areas for improvement, such as improving coordination processes or focusing training. The goal is to minimize change orders to reduce costs and risks and increase profits for all parties involved.

1. Monitoring & Reducing CHANGE ORDERS p r e s e n t a t i o n

2. Presentation Outline Introduction Identify Issues Identify Goals Collect Data (Macro) Analyze Results (Macro) Collect Data (Micro) Analyze Results (Micro) Strategy of Improvement Conclusion

3. Introduction Change Order: Description Written instruction to the contractor issued after execution of the agreement which authorizes an addition, deletion, or revision of the contract sum , contract time , or both . AIA Document G701 I:\Forms\AIA Forms\AIAG701 Change order.pdf Executed by the Owner (prepared by Architect) Agreed to by ALL : Owner, Contractor & Architect

4. Introduction Types of Modifications: Requires a change to the contract sum or time Does not require a change to the contract sum or time Examples: Owner: Design change Contractor: Suggests a change to facilitate construction Suggests a product substitution Design Team: Clarify documents Errors or Omissions Field: Unforeseen conditions require a modification Others: AHJ (code interpretation)

5. Introduction Initiating Modifications in the Work Design Team CB : Construction Bulletin (EUA- ism) I:\Forms\Architect\Construction Bulletin - Milwaukee.dot S:\Studio2\General\Detail-Technical Library\Construction Bulletin.dot PR : Work Changes Proposal Request (AIA G709 ) I:\Forms\AIA Forms\G709 - Final.pdf CCD : Construction Change Directives (AIA G714 ) I:\Forms\AIA Forms\G714 - Final.pdf ASI : Architectural Supplemental Information (AIA G710 ) I:\Forms\AIA Forms\G710 - Final.pdf FO : Field Order (CSI Form 13.4A )

6. Introduction Initiating Changes in the Work Contactor RFI : Request for Information ( Interpretation ) COR : Change Order Request (Proposal) (CSI Form 13.6A ) Owner Correspondences to Design Team and/or GC/CMGC Others Vendors / Suppliers Code officials Others?

7. Identify Issues Tracking C.O.'s by Project Process & format: What do EUA PM’s use? File search: Change Order.xls (Excel): 9 files Change Order.mdb (Access): 0 files Change Order.doc (Word): 0 files No “global” database of C.O.'s By EUA Future: Part of Vision By studio Future: Building Type

8. Identify Goals Reduce quantity and cost of C.O.'s Tangible Measurement of Project’s QC Process Utilize results as a…… Marketing Tool Budgeting Tool Client & GC ranking system

9. Collect Data (Macro) Historical Information PM’s supply data for (2) of their projects Projects completed in 2004/2005 Project’s Construction Cost Total C.O. Quantity (in $)

10. Collect Data (Macro) Historical Information PM’s supply data for (1) of their projects Total C.O. Quantity (in $) Design Team: Error or Omission Owner: Scope Change GC/CMGC: Field (Unforeseen Conditions)

11. Collect Data (Macro) Categorize C.O.’s by Project’s Construction Cost (CC) Less than $500K More than $500K, Less than $2.5M More than $2.5M, Less than $10M More than $10M

12. Analyze Results (Macro) Problem? C.O. totals do not tell the “total” story Contingency Additions vs. New Design Schedule E/O : too encompassing Others???

13. Analyze Results (Macro) Example A: Health Care Addition $10M Const Cost $1M Contingency (10% of Const Cost) Delivery: GC (Design-Bid-Build) Owner requests numerous scope changes during const C.O.'s = $750K Owner’s viewpoint: Successful Owner happy with project Added scope + $250K left in contingency Hires EUA again On paper: Unsuccessful 7.5% C.O.'s of Const Cost (more than EUA benchmark)

14. Analyze Results (Macro) Example B: New apartment building $10M Const Cost $500K Contingency (5% of Const Cost) Delivery: CMGC (Design-GMP-Build) Error & Omissions + Field Issues C.O.'s = $500K (adds) Owner “VE” interior finishes C.O.'s = -$300K (deducts) Total C.O.'s = $200K Owner’s viewpoint: Unsuccessful Owner unhappy with project VE finishes = Reduced Sales Never hires EUA again On paper: Successful 2.0% C.O.'s of Const Cost (less than EUA benchmark)

15. Analyze Results (Macro) Successful Project Profitable EUA/Design Team Minimal rework Where does profit evaporate: CA Phase Owner GC & Subcontractors Risk Management Minimal (no) litigation (by owner/GC) Minimal (no) claims (paid by design team) Future Work Referrals to other clients Repeat work for that client

16. Collect Data (Micro) Dissect the reasons WHY C.O.'s occur Collect more detailed C.O. information C.O. Log WHY? Identify cause of C.O. WHO? Requests change: Design Team / Owner / GC WHAT? Description of change WHEN? Origination – Review – Sign-off WHERE? By building system (Uniformat, BIM – future)

17. Collect Data (Micro) C.O. Log (CA Log?) Format: Access or Excel ? Related information (links?) RFI (Request for Information) COR (Change Order Request) CB (Construction Bulletin) ASI (Architectural Supplemental Information) CCD (Construction Change Directive) Semi-related information (links) Construction Budget Contingency & Allowances Pay Application Non-related information Submittals + Addendum

18. Analyze Results (Micro) Important to EUA Continuous Improvement (staff, process, etc) Risk Management (reduce) Profitability (increase) Important to Staff Development EUA Design Team involvement in project PD (Pre-Design): Designer SD-DD: PM & (1) support staff CD: PM, PAR, (2-3) support staff CA: PAR PC (Post Construction)

19. Strategy of Improvement Identify “problem” areas Example A: 50% of C.O.'s are MEP Coordination issues Fix: Improve “light table” process Example B: 40% of Bldg System C.O.'s are B. Shell-related Fix: Focus in-house training sessions Training of EUA Staff Improve Project-Related Info Mgmt Track issues during design process Connect decisions made during SD-DD-CD with issues that occur during CA

20. Strategy of Improvement PROJECT INFORMATION CA Log CO’s CB’s PR’s CCD’s ASI’s RFI’s Others? PROJECT SUMMARY (per Vision's Info Cntr) General Location Project Scope Cost Submittal Log Design Issues Code Check PROGRAM P.P.D.

21. Conclusion Q uestions??? C omments??? C oncerns??? S uggestions???

22. T H A N K Y O U Monitoring & Reducing CHANGE ORDERS