5.2.4 Manage Contract Changes

Changes are almost inevitable during contract execution, especially for large, complex construction or service contracts. This applies even for fixed price contracts where all scope elements may not have been completely defined prior to the start of the contract. Changes should not necessarily be seen as a cause for concern, but if effectively managed, as opportunities to improve the contract.

Changes may be due to changing business needs, economic trends, technology changes, government intervention, work scope changes, force majeures or other factors. Contract owners will need to be satisfied that any changes requested by contractors are in fact justified and beyond the scope, terms and conditions of the current contract.

A process for addressing contract changes in a timely manner is thus required. The figure below shows a sample process. An important part of the process is an agreed-to dispute resolution process. Such processes often allow for the referral of the contract issue within a specified time period to a dispute arbitration board. Whatever process is used it it necessary to have it agreed to as part of the original contract negotiations, so that it is ready to be used when contract execution begins.