Change orders impact assessment for labor intensive construction

Aggressive scheduling for construction projects is becoming increasingly common in project management because of tight budgets and the client's desires to commence operations quickly. This has led to an increase in the chances and magnitude of project change. Two types of costs are associated with the change orders, direct and impact costs. Direct cost is the original budget, which the project was planned and scheduled for. Impact cost is the negative budget or time influences that the changes or alterations may have on the rest of the project. It causes the contractor to alter the planned sequence of work, use inefficient methods, work in a later time frame, prolong work and, in some cases, stop the work. The research had managerial and quantitative objectives: (1) To develop a quantitative relationship between %Delta (Loss of productivity) and several independent variables for small projects. Small projects are not studied in the existing literature. (2) To develop a regression model to predict that a project would be impacted by change orders in the bidding stage. (3) To identify project characteristics that indicate a project has been impacted using hypothesis testing. (4) To define a quantitative relationship between delay vs. change order. (5) To summarize research findings as recommendations for industry and future research. A list of factors that influence change orders and project performance was determined. These factors were statistically analyzed to represent some early warning signs for contractors to attend to avoid bidding for projects that are likely to be impacted by changes. Several special models were also developed to quantify the impact of change orders on labor productivity for small projects. Hypotheses were developed to capture impact related project factors. Regression models were used as necessary for quantification of the hypothesis and the proposed models. The study was completed by providing owners and contractors with a list of best practices on how to reduce the impact of change orders.