University Slashes Change Order Overruns by 41%
How proactive change management and early warning systems saved $178K on a science building renovation by catching problems before they became expensive change orders.
Project Overview
- Client
- Major Research University
- Project Type
- Science Building Renovation
- Project Value
- $4.2M
- Duration
- 14 months (completed 23 days early)
- Scope
- 35,000 SF lab and classroom renovation
- Role
- Owner Representative
The Challenge
A major research university undertook a comprehensive renovation of a 1970s-era science building to modernize teaching labs and research spaces. The Facilities Management team had learned painful lessons from previous capital projects where change orders routinely added 15-20% to final costs.
Historical Change Order Pattern
Analysis of the university's previous five capital projects (ranging from $2M-$8M) showed a consistent pattern:
- Original budget: 100% of planned costs
- Final cost: 117% average (8-28% range)
- Change order causes:
- Unforeseen existing conditions (42% of overruns)
- Design clarifications and coordination issues (31%)
- Owner-requested scope changes (18%)
- Permit/code compliance adjustments (9%)
For the science building renovation, the CFO established a firm budget ceiling of $4.2M with a 5% contingency. The Facilities Director was tasked with delivering the project on budget without sacrificing scope—a challenge given the building's age and complexity.
The key question: How could they catch problems early, before they became expensive change orders?
The Solution
The university's owner-representative team implemented PRJCT X's proactive change management system, focusing on early problem detection and rapid issue resolution before problems escalated into formal change orders.
Key PRJCT X Features for Preventive Change Management:
- Daily Report Issue Flagging: Field superintendents flagged potential issues in daily reports with cost impact estimates (low/medium/high)
- Proactive RFI Management: System tracked "pre-RFIs"—questions identified during design review before construction started
- Early Warning Dashboard: Real-time dashboard showing all open issues, days open, and estimated cost impact, updated daily
- Rapid Response Workflow: High-impact issues triggered automatic notifications to owner, architect, and engineer for 24-hour response commitment
- Alternative Solution Tracking: For each potential change order, system tracked multiple resolution approaches with cost/schedule implications
- Budget Burn-Down Chart: Live visualization of contingency spend rate vs. project timeline, with trend-line projections
The project team held weekly "early warning" meetings to review all flagged issues, prioritize responses, and make fast decisions on resolution approaches. This shifted the focus from reactive change order management to proactive problem-solving.
The Results
$178,000 Under Budget (41% Reduction)
Final change order costs: $256K (6.1% of budget). Historical average for similar projects: $434K (10.3% of budget). Total savings: $178K.
73 Issues Resolved Before Becoming Change Orders
The project team flagged 127 potential issues during construction. Of these, 73 were resolved through design clarifications, value engineering, or contractor means-and-methods adjustments—without triggering formal change orders.
- 54 avoided entirely: Design clarifications, no cost impact
- 19 absorbed: Contractor adjusted means/methods, no claim
- Only 54 became change orders: True scope changes or unforeseen conditions
Completed 23 Days Ahead of Schedule
Rapid issue resolution prevented schedule impacts. The building opened for Fall semester as planned, with 3-week buffer. Historical projects averaged 2-6 week delays due to change order negotiations.
Early Warning System Prevented Major Overrun
Week 23: Daily report flagged unexpected asbestos in ceiling void. Estimated removal cost: $95K. Within 48 hours, team developed alternative: encapsulation instead of removal, approved by environmental consultant. Final cost: $18K. Savings: $77K.
Without early detection and rapid response, this single issue could have consumed 37% of the project contingency.
"For the first time in my 18 years managing university capital projects, we came in under budget by meaningful margin. The early warning dashboard became our most important project management tool. Every Monday meeting started with: 'What's red on the dashboard?' We caught problems while they were still solvable, not after they'd become expensive change orders."
Robert Delgado
Director of Facilities Management
Major Research University
Key Takeaways
For Facilities Managers
- • Early problem detection prevents expensive change orders
- • Real-time dashboards enable proactive decision-making
- • Rapid response workflows minimize schedule impacts
For Owner Representatives
- • Systematic issue tracking prevents budget overruns
- • Alternative solution analysis finds lower-cost approaches
- • Weekly review cadence maintains problem-solving momentum
Stop Budget Overruns Before They Start
See how PRJCT X's early warning system and proactive change management can reduce your change order costs by 40%+.