Cost Impacts of Change Orders due to Unforeseen Existing Conditions in Building Renovation Projects

Abstract

A renovation project generally requires time, money, or costly equipment to examine the existing conditions of a structure. When unforeseen existing conditions are not properly examined, unexpected costs and/or schedule impacts can adversely affect the successful completion of a renovation project. This paper examines whether the cost impact of change orders due to unforeseen existing conditions is significant compared with the cost impacts of all other change orders, and quantifies the impact on the total project costs and the construction trade. Statistical analyses such as t-test and ANOVA were conducted, using information on 517 change orders obtained from 27 building renovation projects. The results show that change orders due to unforeseen existing conditions have significant impacts compared with change orders caused by other reasons, and that the calculated mean cost is higher for change orders stemming from unforeseen existing conditions. The results also show that the concrete trade is most impacted by change orders from unforeseen existing conditions, while the trade with the highest cost impact is heating, ventilating, and air conditioning. This paper investigates the effect of unforeseen existing conditions on the costs associated with change orders. The paper also identifies those construction trades that are more impacted than others and, therefore, require special attention. This knowledge is essential for identifying areas of possible cost overruns and minimizing overruns in building renovation projects.