Potential Change Order Overview

Potential Change Orders (PCOs) are issues that could affect the cost of a construction project. PCOs are created by the general contractor (GC) to get pricing from subcontractors for changes on a project. A PCO can contain one or more pricing items to one or more subcontractors for a change in the project, depending on how many subcontractors the change affects. Some PCOs may affect the revenue of a project if the owner is willing to pay for the change. All PCOs run the risk of decreasing the profitability of the project. For example, expanding a parking lot that is being built would result in a PCO.

For each PCO, the GC will issue pricing requests to the affected subcontractors. The pricing request will describe the scope of work to be estimated, assign a due date, and provide any supporting documents such as revised drawings.

Goals

A key role of a construction project manager is to actively search out any PCOs, quantify the change, and mitigate the risk to project profitability as quickly and accurately as possible. Key areas for finding PCOs include:

● Design changes;

● Owner requests for additional or changed work;

● Unexpected field conditions;

● Mistakes or oversights in design or construction management.

Any of these issues could be initiated by an item that already exists in Newforma: An action Item, RFI, bulletin, meeting minutes, submittal, email message, etc. The project manager must assemble all of the documentation and correspondence that surrounds a PCO, as well as gather pricing input from other team members.

Managing PCOs is a very time consuming process. A project manager may easily be tracking 40-50 open PCOs at any point in time, each in a varying state of completion. Most will need input from subcontractors who vary in their responsiveness. Some will require extensive internal management review, and potentially an owner review and approval.

The goal of any PCO is to minimize the impact of the change to project profitability. The final step of a PCO is the issuance of formal change orders to subcontractors (to calculate the cost) and to the owner (to calculate the revenue).

Tracking PCOs using Info Exchange

Subcontractors who are members of a project team with access to Info Exchange can do the following tasks:

● Receive pricing requests from GCs with clear deadlines and associated backup info.

● Check the status of outstanding PCO requests through Info Exchange.

● Submit pricing and supporting documents through Info Exchange (otherwise via email messages).

Workflow on Info Exchange

This is a common workflow example for a PCO between a GC and subcontractor:

1. The GC creates the pricing item in Project Center and issues a pricing letter along with supporting documents to the subcontractor.

2. The subcontractor receives an email notification receiving links to access the PCO on Info Exchange. Provided they have access, the subcontractor may login to Info Exchange to view the details or they may click the link in the email notification to open the Complete a Pricing Item page.

3. The subcontractor then completes the information on the page providing a proposed amount, proposed days, supporting files, and other information regarding the pricing item(s).

4. After the subcontractor sends the information, the GC receives an email notification and the pricing items are updated.

Potential Change Order Overview

Goals

Tracking PCOs using Info Exchange

Workflow on Info Exchange

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