Jeff Berkowitz, project coordinator at Lawrence Murr Remodeling, Jacksonville, Fla., and his team prefer to convert large change orders into separate jobs. This allows them to use the company's full process to develop the project. “If someone walked in with a $90,000 job, I wouldn't start it the next day. I tell my customers, ‘I'm doing you a service by separating it and using the same process as for the main job. If I don't, I will fail and you'll be upset,'” he says. The only exception is if the change order is a critical part of the job.
The “additional work authorization” offers several benefits. First, it allows Berkowitz to properly price the job using the company's estimating program. He says that some remodelers believe customers will balk at the additional cost, so they don't charge their full markup. Creating a work authorization allows the company to include its markup.
Second, if he takes on a change order as part of an existing job, it could delay the next job on the schedule. “I might have to bump someone we have committed to,” he says. Third, the clients might want, and authorize, the additional work but not realize that they will be burned out by the end of the main job. Treating the change as a new job gives them a break from the project.
As the main salesperson, Berkowitz decides which jobs are large enough to merit an additional work authorization. “The large change orders will come back to me to sell. My crew can get a signature, but they don't have sales skills. I have communicated with the clients throughout the project, so they know me, and I'm the best person to talk about money,” he says.
For clients who cannot decide on a portion of the job, Berkowitz adds the option to the end of the contract. For example, if they are not sure about renovating the laundry room as part of the kitchen remodel, he will add a section to the contract that says they have to make that decision by a specific date.