Scope Changes During Construction

Dear Anne and Adam,*

Every high-performance project that we design and build is unique, special, and highly custom. We will build the project as designed and specified and we will make the scope changes that you direct. The purpose of the information in this letter is to make sure that you understand the consequences of every directed change and that these changes bring you value for the cost.

There are two costs or credits associated with every scope change. One, the cost or credit for the change in the scope of work. Two, the cost or credit associated with an increase or decrease in the length of the project. Example: it is possible that you could make a $600 scope change, and because it was a late change that affects other areas of work and/or the critical schedule path, that scope change increased the time to complete the project by 5 days. Project management and site supervision can cost $800 per day. The net cost of this late scope change may be $4,600. We strongly advise complete selections and thorough project design and planning prior to construction start and discourage changes during construction for this reason.

On every project, we pursue the work defined by the construction documents, any scope changes directed by you, any work required to address a concealed condition, and/or any work required to address a site or jurisdiction requirement and we invoice you for the work on a time and materials basis, per our agreement. Project invoices and budget updates are trailing information about project cost. In other words, the work is already complete when we know the final cost. This is another reason that we advise fewer changes during construction.

In some cases, it is possible to quickly estimate the cost or credit associated with a directed scope change. Examples include adding two hose bibs or choosing an appliance package that is $2,500 less than initially selected. In some cases, an accurate estimate of the changes takes time. These are usually more complex changes that involve multiple components of work and / or require repricing from vendors or trade partners. An example is moving a wall in a kitchen that may affect framing, plumbing, electrical work, drywall, cabinetry, counters, tile, trim, and more. More complex changes often require design work to price and build. For the latter scope change requests, our default position is to move forward at your direction and invoice for the work per our agreement. At your request, we can pause the project or pause that particular area of work to estimate the cost of the scope changes. Pausing the project can have cost consequences associated with extending the project schedule.

We do document, in writing, your approved scope change requests. This may be in our weekly update or it may be via email.

Respectfully,

Randall Lanou
Company Lead

*Full disclosure: not only have we never worked for Anne Hathaway and Adam Shulman, we've never actually met them. Indeed, I'm not sure we've ever been in the same city at the same time. They seem like fun people, though, and we would be happy to build a home for them. If any of you are close friends with them, we would be grateful for an introduction!