Change Orders in Construction: Why They Don’t Get Paid and How to Fix It

Episode Summary: In this episode of the Contractor Counsel Podcast, hosts Joshua Irvine, a business and tax attorney, and Sean O'Connor dive into the complexities of change orders in the construction industry. They explore how contractors often lose money due to poorly documented changes and the importance of clear communication and documentation. Joshua explains that many disputes arise from verbal agreements and the lack of detailed initial bids, leading to misunderstandings about costs and scope. He emphasizes the need for written confirmations of any changes and suggests using technology to streamline the process. The discussion also covers how contractors can train their teams to handle change orders effectively and incentivize them to ensure proper documentation. This episode is crucial for contractors looking to protect their revenue and avoid disputes by implementing better processes for handling change orders. Key Timestamps: 00:01 – Introduction 00:32 – Understanding Change Orders 01:41 – Common Mistakes in Change Orders 02:27 – Initial Bid Challenges 03:11 – Importance of Clear Communication 04:31 – Contract Language and Client Discussions 05:48 – Building Processes to Avoid Disputes 07:17 – Legal Considerations for Verbal Agreements 08:29 – Tools for Documenting Changes 09:54 – Real-World Examples of Effective Change Management 11:10 – Client Communication and Approval 12:20 – Training Teams for Better Change Order Handling 14:02 – Minimum Requirements for Documentation 15:00 – Incentivizing Team Members 17:48 – Final Thoughts on Capturing Revenue About the Show: The Contractor Counsel Podcast is a must-listen for construction and trade professionals seeking to enhance their business operations. Hosted by business and tax attorney Joshua Irvine, the show provides practical advice on legal compliance, contract management, and financial strategies. With a focus on clear communication and ethical practices, each episode offers insights to help contractors protect their work and grow their bottom line. Whether you're a seasoned contractor or new to the industry, this podcast delivers valuable knowledge to navigate the complexities of running a successful construction business. #ContractorCounsel #ConstructionContracts #ChangeOrders #JoshuaIrvine #SeanOConnor