The Myths of Contracting Part 4: An email change order is good enough

By Steve Ryan

We all know the pain of following a client’s request to modify a project (that is, ask for a change order), only to have them balk at the result.  Either they regret it, are shocked at the additional cost or reject the premise that they requested the change in the first place.  Worse, they decide that it should have been included in the original price.

But sometimes there is just an honest difference in how the two parties recall events or decisions.  What bites especially is that we felt we were going the extra mile to get the change done.

In almost all cases, that pain stems from one common oversight: A change order is a contract and like any contract, change orders contracts need to:

1: Define what was agreed between the supplier and the customer

2: Mark the date on which agreement was reached

3: Define terms of payment

Is it any wonder that conflict occurs when those elements are not documented?

Even if we understand the importance of a documented change order, reality changes the game on us.  Unlike our contract for the overall project, changes occur in mid-stream. Often with change orders, it just isn’t realistic to dig in and wait until all the paperwork and formalities are completed. We press on, because the prime directive on most jobs is to get it done.

The formal documentation is such a distraction that many of us fall into a habit of skipping it altogether and hoping for the best.  Others make a noble effort to document changes by confirming things in an email.  That is better than nothing but watch out. If you don’t recognize the limitations, this is one of those management practices that can let you down.

Your email may tell the client what you intend to do but it doesn’t satisfy all the elements of a contract. For instance, an email doesn’t prove it was received or read. The customer might say, “I Didn’t get the email.” Or you might as for a confirmation but then don’t follow up and chase it down. More often, the email becomes a dialogue of a number of emails and you don’t have a single document that identifies the agreed change. And then, when you really need documentation, weeks or months later, you’ll be combing through hundreds (thousands) of other emails that came across in the meantime. If there is one piece of IT every contractor needs to adopt, my vote is for a mobile changer order ap.

All those conditions of a contract can now be completed in one step, at the very time you get direction from the client.  This is typically an ap on your phone which you open at the time you discuss the change.  You can complete it when you are with them on-site.  Enter a description of the change and attach photos.  Include costs/allowances if you know them, but at least clarify as additional and define terms of payment.   Most critically you capture signatures on screen.  Your formal change order is then automatically formatted and filed.  Your client gets a copy with the push of a button which makes them happy.  It can all be completed in about the time it took you to read this paragraph.

If you already subscribe to a builder software, it probably offers a mobile change order.  Learn to use it and make it a habit.  If you’re not a subscriber, this alone may make it worth the investment.

A mobile change order won’t eliminate clients regretting their choices, changing their minds, or spouses asking what their better half was thinking.  But it does the one thing you need above all when executing changes.  It gives you unequivocal permission to do it.  In other words, whether the client loves it or not, you won’t be left holding the bag.

MMI Professional Services is committed to the success of contractors by helping them develop the business and management skills they need .  For information on ways to run a better building business contact the writer at steveryan@mmiproservices.com