General Contractors work hard to get the best price from subcontractors, vendors and suppliers, in order to win bids, but give away the farm after contract award and NTP, the Dam breaks and the subcontract change orders start to flow.
What’s missing? A thorough executive QA/QC review of contract scope items, that would raise the Red Flags early enough for adjustments.
Legal Analysts expert in Construction Claims litigation will agree that construction clients lose millions of dollars each year because of the lack of attention to scope content and contract loop holes. Among some client owners, there is deep frustration with the fact that the General Contracting world doesn’t seem to want to change the culture that supports the notion that change orders in and of themselves are troubling if you as a GC can’t do more to protect the interest of the Owner as a gesture that demonstrates integrity that could lead to future work. In fact some General Contractors feel they really have to push Change Orders to widen a narrow profit margin that was negotiated low, in order to get the job in the first place. Municipal and government jobs are often fraught with change orders because they are funded by the taxpayers who are ignorant to the practice.
There can be lots of waste because no one is committed to minding the hen house, unlike private sector projects, where investors need to know where their money is being spent. What do we owe our clients? Do we look closely and carefully at scope and give them honest feedback that could mitigate the additional cost and destroy a chance to make additional money?