When it comes to overall project management – such as when a general contractor manages various subcontractors to build a new home – one issue to watch out for is known as scope creep. This is essentially when the overall scope of the project tends to change over time, and it becomes bigger and different than it was when it began.
For example, some construction projects will start with a specified budget, such as saying that the project would cost $500,000. But little things seem to add up. Over time, the project costs $600,000 and then $750,000, and so forth. Scope creep can happen slowly, so each small increase seems necessary and prudent, but it can dramatically change the cost of a project.
Why does this happen?
There are many reasons why this happens. Sometimes, the prices of parts and materials just go up. A project that takes a year to complete could cost much more than predicted if materials are more expensive a year after the quote was written.
Miscommunication can also be an issue. In some cases, customers might expect certain things or assume that they know what they’re getting, when contractors have very different ideas about the goals for the project. As the two sides work together, scope creep could happen just because the customer refines their vision and changes the project.
No matter why it happens, these financial issues can cause a problem. They can ruin the budget for the project, and they can sometimes lead to disputes when a customer is shocked to find out how much the project will actually cost. For construction company owners and general contractors who find themselves in this position, it’s very important to understand all potential legal strategies.