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Controlling Change Requests

6 replies [Last post]
PM Hut
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Joined: 30 Jan 2008
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Controlling change requests is probably one of the most challenging tasks of the Project Manager.

A Project Manager who processes change requests on the spot may very well face some unfortunate consequences.

Some change requests result from a poorly developed Project Plan, but others may very well be the result of external changes in the marketplace/internal changes in the organization.

This article on managing change requests explains what to do in such situations.

Replies

Samer Zawaydeh
User offline. Last seen 5 years 4 weeks ago. Offline
Joined: 3 Aug 2008
Posts: 1664
Dear Raviraj,

The Performance Bond amount usually is reduced on a Monthly basis if the Contract amount is large. By the end of the Contract, the value of the Performance Bond is usually very small or zero.

The retention amount is held back until the Maintenance Guaranttee is submitted. No need to have double shields unless the Conditions of Contract ask for it.

With best regards,

Samer
A D
User offline. Last seen 3 years 20 weeks ago. Offline
Joined: 20 May 2007
Posts: 1027
alright...

normally, here retention money of 10% is split into two. 5% is given back after the project completion & 5% after the DLP is over. Also performance bond validity is extended further upto end of DLP.

Samer Zawaydeh
User offline. Last seen 5 years 4 weeks ago. Offline
Joined: 3 Aug 2008
Posts: 1664
Dear Ravi,

Retention amount is the actual amount that the Client hold back until the works are complete and handed over. This is during the duration of the project. Usually this is specified as 10% with an upper limit of 5% of the completed works amount.

Maintenance Guaranttee is submitted to the Client after the Works have been handed over. Usually, this is specified as 5-10% of the value of the completed works and it is 1 year for the civil works and two yeas for the electromechanical works. Some Clients insist on 3-4 years for HVAC equipment but this is an exception.

Once the Contractor submit the Maintenance G., the client will release the retention money.

With best regards,

Samer
A D
User offline. Last seen 3 years 20 weeks ago. Offline
Joined: 20 May 2007
Posts: 1027
Hi samer,

In point no. 6, u hav mentioned abt retention amount and in point no. 07 u hav mentioned abt maintenance guarantee.

Whats the difference in these two?
Samer Zawaydeh
User offline. Last seen 5 years 4 weeks ago. Offline
Joined: 3 Aug 2008
Posts: 1664
Dear PM Hut,

Thank you for providing this information. This can be useful for several industries.

My remarks are as follows:

1. Change request are made throughout the duration of the project. This can be initiated by both sides due to the following
a. Material Change
b. Shop drawings.
c. Availability of material is the local market.
d. Change is specification.
e. Change in functionality.
f. Change in the Construction sequence.
g. Deliverable Not meeting the expectations of the client.

2. The Contractor has to submit a technical and financial offer that the Engineer must review and recomment to the Client for approval.

3. Change request approval process should be outlined in the Conditions of Contract in order to minimize the disagreement during the Contract duration.

4. Engineer can recommend the payment on account for completed works in any Change Order even if the Change order is not fully approved by the Client.

5. Change orders are documented in each Interim Payment and in each Monthly report.

6. Retention amount is also held back against the completed change order value as per Conditions of Contract.

7. The Contractor has to submit a Maintenance Guaranttee for the complete value of the Contract including the Change orders.

8. Change orders can have negative or positive values.

With best Regards,

Samer
A D
User offline. Last seen 3 years 20 weeks ago. Offline
Joined: 20 May 2007
Posts: 1027
Well written but it would be beneficial if the approach for the change management is elaborated through some flow chart or process diagram.

The flow should show the initiatation by Contrcator’s PM (RFC), Action by Engineer required, PM Consultant Approval (ARF), EI to be issued, Agree on the cost for EI and then settling with the monthly invoice.

People do write lot of good stuff and share too, but then it is not EFFECTIVE if there is no flow chart or colourful pictures to support it.

Thanks for sharing!!

Cheers,