Effect of Change Orders on Cost and Schedule Overruns of School Building Renovation Projects

Abstract

Change orders are common problems in construction projects, and the effect of change orders on cost and schedule have been studied. However, few studies have considered the effect of change orders on cost and schedule overruns of school building renovation projects. This study analyzes data for 161 school building renovation projects, worth $1 billion, constructed in the Las Vegas Valley in southern Nevada. The results show that, on average, the change orders increased the project cost by 3.56% of the total contract cost for these projects and that three-fourths of the project cost growth was due to change orders. In addition, about 4% of these projects faced schedule overruns due to change orders. The study also finds that change orders related to unforeseen conditions (1.45%) and design (1.36%) were significantly more costly than were owner-initiated change orders (.75%). The results of statistical tests show that the percentage of change orders for projects that had schedule overruns (5.26%) was significantly higher than for projects that had no schedule overruns (2.51%). This study finds that unforeseen, owner-initiated, and design-related change orders significantly increased schedule overruns of these projects. In addition, the study finds that change orders increased as the size of the renovation projects increased over $5 million, contradictory to what is found for new construction projects. It is recommended that school district administrators control these change orders in order to minimize cost and schedule overruns on school building renovation projects.