The change order work is done and no one signed it
The crew did the extra work and the paperwork never caught up, so the cost stays on your job.
Every update to the schedule or the scope opens a change of conditions, and that opens a chance for a change order, even a $0 one. The PM documents the change, prices it from the change order estimating sheet and sends it inside the time the contract allows. If pricing takes longer than the contract allows, an email saying so keeps it from becoming a problem. If the contract sets a deadline and it passes, the cost can become the contractor's expense. Doing the work first as time and material, or on a notice to proceed, risks never getting paid and adds to the project cost.
Three moves, in order
Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone following up on them.
Learn this part of the job
SPM The Construction CFO publishes this course. It's a separate company from this one, and the course is on its own school site.
Other problems step 06 solves
Other things that go wrong
What owners ask
Can I make a GC pay for change order work with no signed change order?
The crew did the extra work and the paperwork never caught up, so the cost stays on your job. Every update to the schedule or the scope opens a change of conditions, and that opens a chance for a change order, even a $0 one. The PM documents the change, prices it from the change order estimating sheet and sends it inside the time the contract allows. If pricing takes longer than the contract allows, an email saying so keeps it from becoming a problem. If the contract sets a deadline and it passes, the cost can become the contractor's expense. Doing the work first as time and material, or on a notice to proceed, risks never getting paid and adds to the project cost.
Which part of the system fixes this?
The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone following up on them. It's drawn from chapter 6 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% after taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Document each change of conditions when it opens, and send the change order inside the contract's time frame.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 06 depends on step 04, estimating system. Install it ahead of that and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.