Preventing Change Orders From Going Wrong

While at a dinner last week with one of our contractors (let's call him Adam), we were was asked for our opinion on splitting the cost of a change order with a customer. It's worth pointing out that Adam is an experienced remodeling contractor in NYC.

Adam had been asked by one of his customers (let's call her Mary), for whom he was doing a ~$100k home improvement, to add track lighting in a walk-in wardrobe he was installing. Mary specified the track and bulbs, agreed the price and signed a change order. 

Unfortunately, once installed, Mary complained that the bulbs were too dim to properly illuminate her clothes and asked that he change the bulbs and split the cost with him.

Adam reluctantly agreed but felt uneasy - surely Mary should have investigated the spec of the bulb before signing the change order? Mary on the other hand said she felt Adam should have warned her that the bulbs may not be powerful enough.

Here are some tips from the Bolster team on preventing this issue: 

Get specific - Unlike a product, a home improvement project has no "shape" or "corpus" to review or take apart, only a design and a bunch of words, and so getting these nailed to the highest degree of specificity before starting is absolutely key and helps prevents disputes. That includes light fittings.

Get real - To the customer, the contractor, is the expert, and as such the contractor is expected to know how products will function when installed and advise accordingly. If the contractor does not know how a particular product behaves then they should research it, ask around, ask the supplier, ask Google. 

Manage expectations - If a contractor is still uncertain as to how a product will respond to being fitted they can simply explain to the customer that they haven't installed this product before and that there may be some risks involved. It's easier to remedy mistakes when everyone's aware there's risk involved and these are somewhat spelled out.

Beta test - A concept borrowed from software development - try to purchase / install the minimum amount of product possible so everyone can see how it works without going all in.

Be good to yourself - Everything costs, and that's especially true of a good education! If as a contractor you get caught out, add it to the "lessons learned" line item in the cash flow and try not to make it a habit.