RJ Martin Electric Blog

Change Orders – What Do They Cost, and Who Pays?

“The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

– Benjamin Franklin

 

Mr. Franklin, one of the founding fathers our country, was wise in many ways. Yet even he might not have envisioned how applicable his words are to today’s modern construction industry. Low price isn’t often associated with high quality across the board, but it often ties directly to unnecessary change orders, and sadly, that holds true in the realm of commercial electrical contracting.

Need proof? Consider the sad tale of a recent microbrewery. Not long ago, two beer enthusiasts set out to pursue their dream of opening a microbrewery. They identified a location and began the task of hiring trades to build out the space.

Unfortunately, they chose an electrical contractor that cut corners—lots of them. Worse still, that electrical contractor’s work scope occurred early on in the project, so expensive finishes such as ceiling tiles and wall treatments were completed shortly thereafter.

As the project neared completion, inspectors uncovered multiple electrical code violations due to the shoddy nature of the electrical work. Consequently, the expensive finishes throughout the space either had to be ripped out or severely compromised in order to access the electrical equipment and remedy the violations via multiple change orders. This, in turn, caused significant delays and budget overruns.

Even several months after their planned opening, the ownership group still could not achieve an occupancy permit with the Authority Having Jurisdiction (AHJ). At that point, the group reached out to RJ Martin Electric for help.

After reviewing the situation, we mobilized some very competent electricians and within a few weeks, had them ready for a final inspection, which they passed. The hard lesson learned by the ownership group was that value cannot solely be judged by price.

Change orders, defined as amendments to a construction contract, will never be completely eliminated in the construction realm, including electrical contracting. Situations of all types arise that can necessitate them, from unforeseen conditions to errors and even owner requests. Yet, we at RJ Martin Electric have heard multiple stories through the years of electrical contractors that won a project on a low bid, and then “change-ordered” their way to profitability throughout the duration of the project. This is an industry-wide practice that can cause tremendous stress throughout a project site and make big bottom-line impacts on your overall construction project.

At RJ Martin Electric, we’re committed to getting it right from the beginning. That means outlining the complete scope of our services in our RFP response and subsequent contract, from inception through completion. This exhaustive level of detail may seem complex or burdensome at first glance; but it’s designed to ensure that general contractors (GCs) and end-users in commercial, industrial, health care, retail and education sectors receive no unpleasant surprises from us during the electrical contracting phase of their project.

To that end, we recommend some best practices when it comes to minimizing change orders in electrical contracting projects:

  1. Make sure you get a sufficient number of competitive bids. If you’ve only received a select few bids, or you’re only considering a few, that limits your ability to gauge accurate costs for the electrical portion of your project, and it doesn’t provide sufficient options. 
  2. Write preferences and/or requirements into an RFP, and be clear about expectations. Being vague in an RFP invites vagueness in contractors’ replies. State what is expected, and evaluate responses accordingly.
  3. Thoroughly review an RFP response with the electrical contracting firm prior to the commencement of work. Do you have questions about responses, including how an electrical contractor plans to approach various requirements, or their qualifications in general? If they’re on your short list, ask them. If their responses are at all unsatisfying or unsettling, trust your instincts and think seriously about selecting another contractor.
  4. Establish clear communication lines at the inception of a project, and maintain them throughout its duration. Honest and open communication helps to ensure that surprises – including change orders – are kept to a minimum. If you have existing communications procedures or systems, now is a good time to evaluate them with a critical eye. How well have they served you in the past? Has poor or insufficient communications led to pricey change orders? How could they be improved or optimized?
  5. Do your homework. Know who you are hiring. A legitimate contractor will have a history of past projects that you should be able to scrutinize—and that should help you determine if the firm is a good fit for your project.

Contact RJ Martin Electric to learn more.

We hope this blog helps you understand how to minimize change orders in electrical contracting projects. If you’re looking for an exceptional electrical contracting firm for your next project, or if you want information about RJ Martin Electric’s experience in industrial, health care, commercial, education and retail markets, please call Robert J. Martin at 216-662-7100 or email rmartinjr@rjmartinelectric.com.

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