Change Order Ethics

In Electrical Contracting Articles, Electrical Estimating Articles, ramblings by David PardenLeave a Comment

Many electrical contractors see change orders as a means of improving their profit margins on jobs. Just as many use it as a bidding strategy when they see poorly designed drawings. This thought process drives me crazy! The owner of the project paid the engineering firm good money to design and draw their electrical project. Usually it is not the owner’s fault the engineer did a poor job or made mistakes so why stick it to them?

What it the worst that will happen if the electrical contractor sticks it to the owner? First of all people instinctively know when they are being shafted so you can bet you wont hear from that client ever again, even if they can’t prove it.

Second, the general contractor (if applicable) will know that you are crooked also and likely will not want to work with you again either unless they do not care about their reputation also. If that is the case, look out buddy because general contractors are pros at making subcontractors lives hell!

Third, the engineering / architectural firms will know that you capitalized on their poor workmanship or honest mistake because they will be taking heat from the owner.

Finally, let’s not forget the local inspection department! The city, county, or state approved the bid documents and they have a vested tax interest in seeing the project go forward on time and on schedule.

So unless you have an endless supply of clients that you will never ever work with again you could have at least three or maybe four separate entities out there spreading the word about how your company took advantage of the owner and how your company made everyone in the chain look bad.

Perhaps the worst side effect of all is having all of your change order request scrutinized with a microscope! Engineers and architects are smart people and once you’re on their bad side it aint good! You might win the battle but ultimately lose the war.

Change orders are disruptive to projects and if not properly dealt with can cause an electrical contractor to lose money on jobs so I am not advocating losing money just being fair. As stated in earlier blogs do not start a change order without prior approval and be sure to capture intended and unintended consequences (dollars & time) because that is fair and just.

The contracting world has enough jerks giving us a bad name so why add your name to the list? Ever hear the term “karma” or “what goes around comes around”? It’s true and it does! Grow your business on honesty and integrity and you will be blessed with work for years to come. Electrical contractor’s service departments typically grow from word of mouth and repeat business. Contractors spend months working on a new construction project and getting to know the key players. Why in the world would one consider destroying that relationship for a few extra bucks? Even if it’s thousands! Can you put a price tag on your reputation?

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