Get email alerts on the Project Controls topic
No spam. Unsubscribe anytime.
Committee hears how contingencies and change orders typically play out
Summary
Presenters explained that change orders are common across procurement methods, identified typical contingency rates (initially ~10% reducing toward 5%), and described how CM/GMP and design‑build use savings clauses and open‑book accounting.
Contractors told the committee there is no such thing as a perfectly defined project and that change orders arise for underground conditions, owner‑initiated changes, or errors in drawings. They recommended planning contingencies and described contract language for savings and guaranteed maximum price (GMP) clauses.
"Our first go around on an estimate, our contingency may be 10%... Normal for us is the 5% contingency going forward," said Peter Middleton, describing how early estimates include higher contingency that is refined as design progresses. Speakers also gave examples of how savings at the end of construction have sometimes been reallocated to add features, such as air conditioning, without increasing the GMP in earlier projects.
Committee members emphasized the need for careful drawing reviews and close owner involvement in finishes to limit owner‑driven change orders, while presenters recommended owner representation or a project manager for more complex work.
AI generated
The text on this page is AI generated. Summaries, highlights, analysis, and video transcripts are all produced from the original source material.
AI can make mistakes, so if you spot one, and we will fix it for everyone.
Note: the source content is unaltered by us. Any content source we link to, be it a video, an audio recording, or a document, is presented exactly as its publisher released it. That publisher is usually a government body, sometimes an individual official or another organisation.
