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Covid 19 Change Orders Phase 3 - Owner Costs

Unfortunately, much of the cost for changes driven by subcontractors and CM's will end up in the owner's lap. But there are costs that are driven by the owner as well:

  1. Design changes to accommodate changing program, changes to health requirements or even to updated codes due to the virus. Universities, hospitals, offices, you name it. The design for almost all structures will be impacted by this virus in large and small ways, and owners will want to avoid building spaces that they will only have to immediately modify to meet new codes or program needs. This will lead to post-award design changes that will result in project cost changes.

  2. Project owners, like the rest of us, are under additional financial pressures post-lock down, and these pressures may impact the ability to finance construction in the short term, possibly resulting in schedule changes. Similarly, markets or products that were planned may diminish in priority, and be shifted out or longer, while other projects may require acceleration to meet an opportunity. Schedule changes often result in increased cost, due to material or labor escalation, additional CM labor or other costs.

  3. Changing work rules - Owners may also find the need to restrict access to sites during certain periods, or may choose to limit on site manpower even more than local requirements. These additional restrictions and changes will have cost impacts.

Untangling the web of changes, and who is responsible for which additional costs, will be significant challenges for teams of owners, construction managers, and contractors. And it should come as no surprise that working together proactively to resolve the questions fairly and rapidly will be the best solution.

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