At some point, someone told owners that change orders are just part of construction. Budget a 10%contingency, expect a few surprises, and move on. It has become so accepted that most owners don’t even question it anymore. They just build the extra money into the pro forma and hope the final number doesn’t blow past that.

The problem with that mindset though, is it treats all change orders as a construction problem when in reality, a lot of them are actually a preconstruction problem. By the time a contractor is on-site submitting a change order, the damage was already done weeks or months earlier during the bid process.

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Where Change Orders Actually Come From

Preventable change orders traceback to one of two things: incomplete drawings, or scope gaps in the bid. The drawings issue is real and sometimes unavoidable. But scope gaps in the bid?Those are almost always preventable.

A scope gap happens when a contractor submits a bid that doesn’t include everything the project requires, and nobody catches it during the review process. Maybe they left out an allowance for a specific trade. Maybe they excluded something that was buried in the notes section of their proposal and nobody read that far. Maybe two contractors priced the electrical completely differently and instead of asking why, the team just picked the lower number and moved on.

None of that excluded work disappears. It just shows up later as a change order, at a price you have no leverage to negotiate because the contractor already has the job.

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The Contingency Is Not Protecting You

Owners are often told to set aside a contingency for exactly these situations. And yes, having a contingency is smart and necessary. But a contingency is not a strategy. It’s a buffer that exists because the bid process let problems through that should have been caught upfront.

When you spend your contingency on change orders that stem from scope gaps, you have nothing left for the actual surprises. The ones that come from conditions nobody could have anticipated. The hidden structural issue. The utility conflict. The thing that genuinely could not have been known until construction started. Those are the situations a contingency is supposed to cover. Using it to clean up a bad bid process means you are one real surprise away from a serious budget problem.

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What a Better Bid Process Actually Prevents

When bids are collected in a standardized format and reviewed properly, scope gaps become visible before anyone signs a contract. If one contractor is $200,000 lower than the others on a specific trade, that’s not necessarily good news. It might mean they priced it wrong, excluded something, or are planning to make it up somewhere else. A thorough bid review asks those questions before the project starts, not after.

Standardized submissions also make it easier to hold contractors accountable to what they actually bid. When every line item is documented and agreed upon upfront, there is less room for a contractor to come back mid-project and claim something wasn’t in their scope.The paper trail is clear.

This is not about being adversarial with your contractors. Most GCs are not trying to low-ball a bid and make it up in change orders. But even well-intentioned bids have gaps when the process for collecting and reviewing them is inconsistent. A better process protects everyone.

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The Question Worth Asking Before Your Next Project

If you have consistently ended up above your original contract number on past projects, it’s worth looking at where In those overruns actually started. most cases, the answer is not bad luck or bad contractors. It is a bid process that wasn’t set up to catch the gaps before they became problems.

Change orders will never go away entirely. But the ones that come from a sloppy bid review absolutely can.That money does not have to leave your pocket.

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Want to see how Outbidd helps owners catch scope gaps before they become change orders?

Book a call at outbidd.com or reach out at [email protected].

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