In the world of construction, changes are inevitable. As projects progress, unforeseen circumstances, design modifications, or site conditions often require adjustments that affect both the schedule and budget. These adjustments are managed through the Proposed Change Order (PCO) and Change Order (CO) process, a critical mechanism for ensuring project success while maintaining transparency and control.
At iMark Commercial, we specialize in managing these change orders efficiently, ensuring all stakeholders remain informed, costs are fairly assessed, and the project stays on track. This blog provides an in-depth look at the PCO and CO process and how iMark’s approach supports owners, architects, and general contractors in managing these changes seamlessly.
What Is a Proposed Change Order (PCO)?
A Proposed Change Order (PCO) is an initial request submitted by the general contractor (GC) to alter the project’s scope, cost, or schedule. Changes can stem from several factors such as unforeseen site conditions, design modifications, material substitutions, or owner-requested changes.
The PCO serves as a formal document that outlines the reasons for the change and its impact on the project. This includes:
- A detailed explanation of why the PCO is being submitted.
- Justification for the change and its necessity.
- An analysis of how the change will affect the project’s timeline.
- A breakdown of the associated costs, including the general contractor’s margin.
For the project owner and other key stakeholders, understanding the PCO and its implications is vital to making informed decisions about whether to accept or reject the proposed changes.
Key Steps in the PCO & CO Process
At iMark Commercial, we manage the PCO and CO process with precision and attention to detail, ensuring all parties are aligned and informed. Below is a step-by-step breakdown of how the process works:
1. General Contractor Submits PCO Request
The general contractor submits a PCO request detailing the reason for the proposed change, its impact on the schedule, and a full pricing breakdown at fair market value. This request often includes supporting documentation from subcontractors or vendors who are affected by the proposed changes.
2. iMark Evaluates and Analyzes the PCO
Once the PCO is submitted, iMark steps in to thoroughly evaluate the general contractor’s request. This includes a careful analysis of all costs, ensuring that the pricing aligns with fair market value. iMark also assesses how the proposed change will impact the project’s timeline and overall feasibility.
3. iMark Submits a Recommendation to the Owner and Architect
After our evaluation, iMark prepares a detailed recommendation that is submitted to both the project owner and the architect. This recommendation includes:
- A clear justification of why the change is necessary.
- An assessment of the change’s impact on the schedule.
- A breakdown of all associated costs, including the general contractor’s margin.
By presenting this comprehensive analysis, we help owners and architects make well-informed decisions about whether to proceed with the proposed change.
4. Architect Provides Input to the Owner
Following iMark’s recommendation, the architect reviews the PCO and offers their input to the project owner. This architectural review focuses on ensuring that the proposed change aligns with the design intent and any regulatory requirements.
5. Owner Reviews and Evaluates the PCO
The final decision on whether to approve or reject the PCO lies with the project owner. The owner reviews the PCO, the analysis provided by iMark, and the architect’s recommendation. If any questions or clarifications arise, the owner can forward these back to iMark, the architect, and the general contractor for further clarification.
6. Owner Accepts or Rejects the PCO
Once the owner has completed their evaluation, they must either accept or reject the PCO. If accepted, the PCO moves to the next phase and becomes a formal Change Order (CO). If rejected, the proposed change is not implemented, and the project continues as originally planned.
Transition from PCO to Change Order (CO)
Once a PCO is accepted by the owner, it becomes a Change Order (CO). A CO is a formal amendment to the original construction contract, signifying that both parties agree to the changes outlined in the PCO. The CO includes:
- A full description of the change.
- The revised project scope.
- The adjusted budget reflecting the added or reduced costs.
- The updated project schedule, if applicable.
It’s important to note that multiple PCOs may be consolidated into a single CO. For instance, if several minor changes are proposed over a short period of time, iMark can combine these into one CO for efficiency, reducing administrative burden and streamlining the approval process.
Why Managing PCOs and COs is Essential for Project Success
The PCO and CO process is more than just a paperwork exercise—it’s a critical component of effective project management. Mismanaging change orders can lead to budget overruns, schedule delays, and strained relationships between stakeholders. By handling PCOs and COs professionally, iMark ensures that changes are integrated smoothly into the project without unnecessary disruption.
Here’s why the proper management of PCOs and COs is essential:
1. Maintaining Budget Control
Each change to the project has a direct impact on the budget. By evaluating the costs associated with a PCO, iMark helps ensure that the proposed pricing aligns with fair market value. This avoids inflated costs and helps maintain the overall project budget.
2. Ensuring Schedule Integrity
Any change to a project can potentially delay its completion. By analyzing how a proposed change will affect the project timeline, iMark helps ensure that changes are implemented without unnecessarily prolonging the project.
3. Ensuring Transparent Communication
With multiple stakeholders involved—owners, architects, contractors, and subcontractors—it’s critical that everyone stays on the same page. iMark’s role is to facilitate transparent communication, ensuring that the owner is fully informed of the reasons for the proposed change, its financial impact, and how it will affect the schedule.
4. Improving Stakeholder Confidence
When change orders are managed efficiently, it builds trust between all parties. Owners can feel confident that their interests are being safeguarded, architects can ensure the project’s design integrity is maintained, and general contractors can be assured that their requests are being given fair consideration.
iMark’s Role in Managing PCOs and COs
At iMark Commercial, we recognize the importance of effectively managing change orders to ensure the success of any construction project. Our comprehensive approach to handling PCOs and COs includes:
- Thorough Evaluation: We perform a detailed analysis of every PCO request, ensuring that all costs are justified and aligned with fair market value.
- Clear Communication: We serve as a bridge between the owner, architect, and general contractor, facilitating transparent and timely communication.
- Efficient Tracking: iMark tracks all PCO requests and ensures that they are managed efficiently, combining multiple PCOs into single COs when appropriate to streamline the process.
- Ongoing Support: Our team is always available to address any questions or concerns that arise during the PCO and CO process, ensuring that owners are fully informed before making any decisions.
Next Steps: Navigating Your Project with Confidence
Managing changes in construction is a delicate balance of maintaining control over budget, schedule, and design integrity. At iMark Commercial, we specialize in ensuring that every change is handled with precision and care, from the initial PCO submission to the final CO approval.
If you’re looking for a reliable partner to help manage the PCO and CO process for your project, contact us today. With decades of experience in construction management and consulting, iMark Commercial is here to guide your project to success. Visit www.imarkcommercial.com to learn more about our services and how we can support your next venture.