Managing out of scope work, which involves change orders, time, and materials is one of the most critical aspects of staying profitable and efficient on the jobsite. According to industry research, change orders and out-of-scope work can cause significant disruptions to construction projects, leading to delays, cost overruns, and strained client relationships.

A report by Navigant Construction Forum found that 35% of projects experience delays directly related to change orders. The Construction Industry Institute (CII) estimates that change orders increase a project’s cost by an average of 10-15%. With proper control over these elements, trade contractors can avoid seeing their margins shrink while project timelines stretch.

To avoid these costly pitfalls, trade contractors need a robust strategy for efficiently managing time, materials, and change orders. Here are ten actionable tips for controlling these key project elements.

1. Standardize Documentation and Out of Scope Workflows

Transparent, standardized workflows for managing time and materials, especially out-of-scope work, are essential for avoiding miscommunications and delays. Standardized forms for time and materials (T&M) tracking and a centralized digital platform for change orders help ensure that everyone on your team follows the same process. This standardization creates a consistent paper trail that can be referred to when disputes arise, saving you time in addressing issues.

Tip: Implement a mobile field data collection system like Rhumbix Time & Materials Tracking. This system allows crews to document work in real-time, providing immediate insights into costs and activities for out-of-scope work.

2. Utilize Technology for Real-Time Tracking of Out of Scope Work

Real-time tracking of time and materials is crucial to ensure that any out-of-scope work or change orders don’t eat into your project margins. Use digital platforms that allow field workers to log hours and materials used directly from the jobsite. These platforms should integrate with your project management software to create a seamless process that reflects accurate data.

Tip: Rhumbix’s Time & Materials Tracking solution offers real-time visibility into labor and material costs, ensuring accurate data capture and billing.

3. Have a Clear Change Order Process

A clear and structured change order process helps prevent out of scope work work from derailing your project. Create a transparent approval system where the project manager, foreman, and client sign off on change orders. Ensure all parties understand the process for initiating and approving change orders, including the cost and timeline implications.

Tip: Use Rhumbix’s Change Order Management to streamline the submission, tracking, and approval of change orders, ensuring they’re handled efficiently and transparently.

4. Set Clear Expectations with Clients

Many issues surrounding out-of-scope work and change orders arise from poor communication and a need for more explicit expectations with clients. From the beginning, set the stage by thoroughly reviewing the scope of work with clients and clarifying how change orders and additional work will be handled. Be upfront about how much extra time and materials will cost, and make sure your clients understand that unauthorized changes could lead to delays.

Tip: Include a detailed section on change orders and out-of-scope work in your contracts and ensure clients acknowledge it. Reinforce the procedures with tools like Rhumbix’s Change Order Management to track all changes in real-time.

5. Implement Digital Timekeeping Practices

Accurate timekeeping is essential for tracking labor costs associated with change orders and out of scope work. Digital timekeeping solutions can simplify this process, giving you insights into how much time is spent on out-of-scope tasks. This visibility helps contractors avoid losing money on unbilled labor and ensures workers are compensated correctly.

Tip: Utilize Rhumbix’s Timekeeping solution to easily track labor hours, including those spent on out-of-scope work, ensuring accurate billing and project control.

6. Maintain a Detailed Log of Materials Used

Materials can quickly spiral out of control if not closely tracked. Maintaining a detailed log of materials for out-of-scope work ensures you have accurate records of what’s being used and when. This transparency will allow you to back up change order requests with factual data, helping justify any additional charges to the client.

Tip: Use Rhumbix’s Time & Materials platform to log and track material usage in real time, ensuring all material costs are documented and billable.

7. Train Your Team on Out of Scope Work Procedures

Having a clear change order process is great, but your team will still face challenges if they need to learn how to follow it. Ensure your crew is well-trained in identifying out-of-scope work and the procedures for reporting it. Foremen and supervisors should be able to communicate when change orders are needed and have the authority to halt work until approvals are obtained.

Tip: Hold regular training sessions to review change order protocols with your team, emphasizing using tools like Rhumbix Change Orders to streamline communication and approvals.

8. Monitor Project Progress Against Benchmarks

Keeping control of out of scope work involving time and materials requires ongoing monitoring against established benchmarks. If you consistently exceed budget or time on specific tasks, it may be a sign that the scope could be managed more effectively. Use real-time software to monitor project progress and compare it against your benchmarks. This can help flag out-of-scope work early before it becomes a significant issue.

Tip: Implement project tracking systems that provide real-time updates. These systems allow you to identify when you’re veering off course and adjust accordingly. Rhumbix’s suite of tools enables you to benchmark your labor and material costs to ensure they align with your initial project plan.

9. Ensure Accurate and Timely Communication

Breakdowns in communication often lead to disputes over change orders and time tracking. Ensure your communication is consistent and timely, especially when submitting change order requests or tracking material usage. Delays in communication can result in costly disputes, especially if work is done without formal approval. Utilize collaboration tools that make it easy for all stakeholders to stay in the loop.

Tip: Use field software platforms like Rhumbix’s Change Order and Time & Materials solutions to centralize communications about time, materials, and change orders, ensuring all stakeholders have real-time visibility.

10. Leverage Data Analytics to Improve Future Projects and Out of scope work

The data collected from time and materials tracking and change order management isn’t just for immediate project control—it can also be valuable for future projects. Use analytics to review past performance, identify trends, and adjust your processes. This continuous improvement loop helps you become more efficient over time, reducing the need for last-minute change orders and out-of-scope work in the future.

Tip: Rhumbix’s platform provides powerful analytics that help you identify patterns in time and material usage, allowing you to improve efficiency and managing out of scope work on future projects.

Conclusion

Control over time, materials, and change orders is critical for trade contractors looking to protect their profit margins and maintain client trust. By implementing standardized processes, leveraging real-time technology like Rhumbix’s solutions, and focusing on clear communication, contractors can mitigate risk of delays and disputes with their general contractors.

Proper management of change orders ensures that any extra work is handled efficiently and transparently, keeping the contractor and client on the same page throughout the project lifecycle. With these ten tips, trade contractors can take proactive steps to manage out-of-scope work effectively.