Change Order Impact Analysis

A client asks a contractor to add a new system after work has begun; the added hardware has a price but may also affect design approvals, other trades and the completion date, and change order impact analysis sets out those effects before a decision is made. AIA Contract Documents describes change orders as written adjustments to contract work, price or time, and AACE discusses contract change management in engineering and construction.

Actual notice, authorisation and entitlement rules depend on the signed contract and local law, so the analysis should not silently become approval. Describe the change by stating exactly what is added, removed or modified, including drawings and specifications, and locate the baseline by comparing the proposal with the current approved scope, schedule and budget, since a change may already be included in the contract.

Record the request source, because a client instruction, design revision or site condition can carry different responsibilities, and preserve dates and original wording. Check notice requirements too, as some contracts require prompt written notice before extra time or money can be claimed.

Estimate direct cost by itemising materials, labour, equipment, subcontractor quotes and disposal under contract rules, because a single lump sum hides assumptions. Check credits: removing work may reduce cost, but cancellation fees, restocking and redesign can offset the saving, so show the net effect.

Review contract rates as well, since unit prices, markup and daywork rules may apply under the signed agreement's valuation method. Assess schedule by identifying affected activities, procurement lead times and dependencies, since a change on the critical path can matter more than its labour hours suggest, while a delay to one task may not delay completion if float is genuinely available.

Check design coordination, because a new duct may conflict with electrical routes or structure, and check approvals such as permits, landlord consent, safety review or customer sign-off. Long-lead items may need orders before installation, and quotes can expire, so record validity and price risk.

Consider productivity, since doing work out of sequence can raise access and rework cost, and support any disruption allowance with evidence. A longer project can require extra site overhead such as management, hire or temporary services, which should be tied to actual time impact.

Inspect risk specifically, as safety, testing, warranties and interface responsibility may change, and update cash timing, because a cost increase at completion and an immediate deposit have different funding implications. Separate estimate from approval: a priced proposal is not permission to start work, so track pending, approved and rejected states and record exclusions such as testing, commissioning or permits that are not priced.

Check overlap between changes to avoid double counting delay or labour, preserve contemporaneous records such as photos, site instructions, timesheets and quotes, and report uncertainty where a site condition has not yet been opened up. After approval, update drawings, budget, schedule and procurement instructions, include tests, handover documents and warranty updates, and forecast the cumulative impact so the owner can compare benefit, cost and alternatives before committing.