How to Handle a Project that is Spiraling out of Control

My current remodel has been challenging to say the least. What was to be a kitchen remodel and light first floor renovation has snowballed into a structural retrofit as well as an exterior renovation. Our scope has expanded significantly, our schedule has been impacted, and the budget has been growing. This is an extremely difficult situation for everyone involved. Subs, clients, employees, designers, subsequent jobs, families, etc. Many people have asked me how I am handling this with the customers? How to ensure your customers have the ability to afford such a significant impact to the budget? How do you juggle the daily changes to scope? There are many things to consider each and every day. 

First off, I want to say that the customers have been nothing but understanding and trustworthy during this experience. They have allowed me to do my job and entrusted me with taking the reins and moving ahead. They are not living in the home, so we are not seeing each other on a daily basis, but we speak as needed. To be honest, I could probably communicate more thoroughly, but I have been running into so many issues that my main goal is to keep the work in place in order to further progress and determine a plan of execution. You must keep in mind that these changes and unforeseen circumstances are not fixes that we can elect to do or not. They must be done in order to proceed. We are not talking about design decisions, we are talking about health and safety. That makes the conversation a little bit easier. 

At first, I was engaging my customers with each issue, but I have elected at this point to brief them when I have a more comprehensive understanding of the issues and the resolutions. I continue to approach them with problems that have solutions or at least an idea of how we can proceed. That does not mean that my fix will in fact work, but it is a step in the right direction. If I have a conversation in person, I do my best to follow up with an email so that there is written documentation of my findings and the path forward. I also do my best to provide some sense of budgeting. If I do not have an exact idea of cost, I provide them with loose budgeting. I provide them with costing for various options, and then discuss the pro’s and con’s of said options.

The most important thing is for your customers to understand the scope of what must be done. This is why it is so critical to develop a detailed scope and line item budget at pre-construction. If not, you do not have a leg to stand on moving forward. I tell my subs, the exact same thing. On this project my electrician sent me a rough number with no scope. I told him, I need a written scope, because if the job ends up varying from what you priced, there is no way to justify that to the customers. If the electrical costs $5,000.00 more and you cannot prove a change in scope, no one will be happy. This goes for me and my work as well. During this project I can definitively illustrate what is extra work and what was included in the original scope. This legitimizes the changes and articulates exactly what was extra to your customers. 

Many people have been asking me how to protect myself as far as payment for services rendered. In this case, if I had to wait on an answer as to how to proceed for every change, I would not be able to get anything done. I am putting work in place that may not have necessarily been signed off on at the point of execution. You must be careful doing this from a legal standpoint. In my opinion there is a time and a place for legalities and there is a time and a place for what is right and wrong. At some point you must trust your customers as they trust you. I have had numerous conversations with my customers as to how these changes have impacted the scope and budget. They are aware of the added financial implications to the order of five or tens of thousands of dollars. I have had numerous conversations in person with them explaining that I am concerned and want to ensure that they have a financial plan in place and to put it bluntly, that they can afford this. 

This is not a judgment and I do not intend to offend my customers or anyone else for that matter, but when your scope/budget has increased by 50% or more, you have to ensure that they have money to pay for this work. Whether they have to borrow it, pull it from savings, or simply have it already, you must be certain that they have a plan in place. It is your job to ensure that they are protected which in turn protects you. There is nothing wrong with saying, “Hey, I understand that this project is massively over-budget, and I want to ensure that we can afford all that we intend to do.” Whether you have to reduce scope on the back end, help them develop a budget to borrow money, or phase the project, this is a team effort. Put yourself in your customers shoes. How would you want to be treated in this situation? What conversations would you want to have? What information would be valuable to you?

At the end of the day, I want the opportunity to complete my original scope of work and guarantee a quality product. If I am not afforded the opportunity to fix what needs to be fixed, I have to decide how to proceed. For me to complete a first floor renovation under a roof or facade that is leaking from above is risky business. Is that something that I can stand behind? I also have to balance that with what my customers can afford. That is why communication is so important. Your customers must understand your findings, the solutions, and the impacts of such. How much more will this cost? How much longer will we be out of the house? Do we have any recourse for the findings? Can you help us find a lender to help with the additional costs? Can you wait longer between payments for them to pull money from savings? These projects often highlight and focus on the problems when the solutions are far more critical. Focus on the solutions, your customers’ needs, and communicating, and your job will be much easier and far more successful.

- Tyler Grace