Change Orders

When and how to use them to save time and money

Changes to the plans or specifications are a fact of life for custom boatbuilders and, unfortunately, they are often a source of confusion and disagreement between the boatbuilder and his customer. Don’t take them lightly and remember the following:

  • Before you can determine what constitutes a change, you must have detailed plans and specifications for the project. Not having clearly written specifications is often the reason for disputes with a customer.
  • Make sure that the contract for building the boat has a clause to deal with changes and follow it to the letter – every change, no matter how small, is a potential problem. Note: click here to download a sample template for a boatbuilding contract.
  • Changes are usually requested by the customer as they see the boat taking shape, but you may also have to ask your customer to agree to a change if, for example, you can’t get the specified materials or equipment.
  • After you have given the customer a firm price and signed a contract for the boat, you are in the driver’s seat if he/she wants changes. Changes can be very expensive and disruptive to your operation, so think about them carefully and don’t agree to them without considering the cost and other implications. It’s important to be reasonable and fair to your customer though – because you may need them to agree to one of your changes.
  • Never make a change that you want without getting the customer’s approval first – it is their boat, after all. Remember that changes to brands, colours, fabrics, fittings, etc. can really upset some customers, to the point where they may refuse to take delivery.
  • Many builders see an opportunity to make extra profit from change orders – if the customer really wants a change they often don’t mind paying for it, as long as it’s made clear to them what the cost will be. If the customer thinks a change is too expensive, then they may not go ahead with it – which is probably good for the builder.
  • WRITE DOWN all changes and get the customer’s signature on a change order form every time (click here to download a sample form, and click here to download a customizable form you can use for your business). If you agree to a change over the phone, follow up immediately by sending out a change order form – and don’t do the work until you get the signed / approved form back.
  • The change order form should clearly describe the change and all implications flowing from it – not just the cost. Pay particular attention to the potential or estimated effect on the delivery time for the boat.
  • Make sure that you estimate the real cost of changes correctly and don’t do them for cost – add your normal markup.
  • When it’s hard to estimate your costs accurately, which can be particularly difficult when you have to undo some work that’s already done, consider doing a change only if your customer agrees in writing to have it done on a cost basis of “time and materials”.
  • Be wary of the customer who starts requesting changes very early on in the project. Let the customer know that changes will be expensive and could delay the delivery time of his boat.