Change Orders and Lessons Learned

Many times, change is necessary for the success of a project. “Change, defined as any event that results in a modification of the original scope, execution time, or cost of work, happens on most projects due to the uniqueness of each project and the limited resources of time and money available for planning” (Hanna, Camlic, Peterson,& Nordheim, 2002). While change orders are necessary to address unforeseen conditions and other unavoidable or unanticipated occurrences, they tend to negatively affect construction. In most public works, change orders are the main reason for construction delays and cost overruns (Wu, Hsieh, & Cheng, 2005). Change orders also lead to a decline in labor efficiency, loss of man hours, and costly disputes (Moselhi, Assem, & El- Rayes, 2005). It is important to understand the impact change orders have on project performance, but it is also important to understand the cause of change orders. Before change orders can be handled properly, owners must be aware of the reasons behind change orders. This research examines change orders on Kentucky Transportation Cabinet projects and focuses on identifying the leading cause of change orders, identifying the types of changes orders that produce the highest risk, and developing a procedure for pricing change orders. This research is intended to help the Kentucky Transportation Cabinet better manage change orders on highway construction projects. From hereafter, the Kentucky Transportation Cabinet is referred to as the Cabinet.