Stay Plugged In With Canon
Latest News & Updates

When owners push for scope reductions or tighter specifications after a project has begun, contractors face a dual challenge: maintain schedule and quality, and protect financial terms that reflect altered work. The first step is to document every directive promptly, noting dates, the exact wording of requested changes, and the rationale given by the owner. This record becomes the backbone of your claim for equitable adjustment. Alongside documentation, review the contract’s change procedures, notice requirements, and any defined thresholds for approvals. Timeliness matters; missing a cutoff can erode leverage. A calm, professional tone helps preserve collaboration, but you must separate partnership from surrender of essential rights.

In many contracts, owner-directed scope squeezes trigger a formal change-order process. Do not shortcut this path, even if the owner implies informal approval. Submit written notices that quote the specific clauses you rely on, summarize the impact on cost, schedule, and risk, and request a formal assessment. Prepare a parallel assessment of life-cycle costs and risk exposure to be ready for negotiation. The goal is to convert vague requests into structured, billable changes rather than ad hoc concessions. By insisting on a documented process, you protect your entitlement to equitable adjustment while preserving the opportunity to optimize alternatives that meet the revised scope without unfair cost shifts.

A critical element of response is identifying the precise elements of scope that are being squeezed and mapping them to contract terms. Distinguish between owner-directed changes and procurement or design coordination gaps that may be the contractor’s responsibility. This clarity reduces blame shifting and clarifies who bears risk for schedule delays or material supply issues. Use a scope-split approach: separate items that are clearly within the owner’s revised direction from items requiring revision in the baseline. This separation enables more precise pricing and prevents dilution of the contractor’s claim for equitable adjustment when compromise is attempted on other lines.

Engage early with stakeholders to discuss the implications of the squeeze. Open, fact-driven conversations about time-sensitive impacts on site access, sequencing, and resource allocation can reveal opportunities to re-sequence work efficiently. While dialogue is essential, maintain a disciplined posture around pricing and risk allocation. Bring objective data to the table: updated schedules, material lead times, labor productivity projections, and contingency plans. By balancing cooperative dialogue with firm documentation of your rights, you create a credible foundation for negotiation and adjust scope in a way that preserves financial fairness.

Your internal analysis should quantify the delta between the original plan and the owner’s new direction. Develop a robust change-order package that separates price, schedule impact, and risk shift for each affected activity. Include unit-rate impacts, material price escalations, subcontractor pass-throughs, and any soft costs such as extended site supervision or temporary facilities. Present a clear baseline and a revised baseline illustrating the impact. Concrete, itemized numbers reduce ambiguity and support claims for equitable adjustment. Ensure the analysis is auditable, with sources cited and assumptions stated so the owner’s team can review and respond constructively.

In parallel, explore economics of alternative methods that satisfy the revised scope while controlling cost growth. Propose value engineering options that do not sacrifice safety or performance but may streamline processes, reduce waste, or change sequencing to recover lost time. Each option should include a cost impact, schedule effect, and risk trade-off. Demonstrating practical, implementable alternatives strengthens your negotiating position. It also signals to the owner that you are committed to project success without surrendering your right to fair compensation for changed conditions.

As you prepare to present the change opportunity to the owner, align stakeholders around a common understanding of the revised scope. Create a single, concise briefing that explains what changed, why it changed, and how it affects cost and timing. Include a high-level risk register that flags potential escalation points, supply chain vulnerabilities, and labor constraints. The ability to speak with one voice reduces confusion and accelerates decision-making. A well-structured briefing demonstrates that you are proactive, not reactive, and that you have a plan to keep the project on track while preserving your right to equitable adjustment.

Following the briefing, formalize the agreement in writing with explicit acceptance criteria and re-baselining details. Update the contract records to reflect the revised scope, the agreed price, and the new schedule milestones. Ensure that all changes are incorporated into the corresponding contract amendments, with signatures from authorized representatives. This formalization creates a clear, enforceable trail that supports your right to compensation for the owner-directed changes. It also minimizes future disputes by documenting mutual understanding and agreed risk allocations.

When disputes arise about the scope squeeze, leverage early dispute resolution mechanisms embedded in many contracts. Seek mediation or rapid adjudication when appropriate, before adversarial proceedings escalate. Present a concise, well-supported case that focuses on the contractual basis for equitable adjustment rather than generalized tensions. Prepare a narrative that links each changed item to a contract clause, a priced change, and a schedule impact. Early, principled engagement can preserve working relationships while protecting your economic interests, providing a pathway to resolution without compromising your rights.

It is essential to understand how equitable adjustment interacts with other compensation provisions, such as liquidated damages, acceleration, or incentive clauses. Clarify whether the owner’s squeeze triggers any offsets or offsets are specifically excluded by contract. Work with counsel or a specialized contract administrator to ensure that your claims do not duplicate or conflict with other compensated changes. A comprehensive, non-overlapping approach reduces ambiguity and strengthens the credibility of your request for fair compensation.

Beyond the financial mechanics, consider the broader project governance implications. Scope squeezes often reflect stronger owner pressure or shifting priorities; respond with a governance mindset that protects yourself and your team’s morale. Establish internal dashboards to monitor change requests, approvals, and progress against revised baselines. Transparently share status updates with trusted stakeholders to prevent scope creep from becoming a pervasive pattern. A disciplined governance framework supports equitable adjustment by documenting adherence to process, accountability, and timely execution of approved changes, reinforcing the contractor’s professional standards.

Finally, cultivate a proactive risk management culture that anticipates future squeezes. Build a standardized playbook for responding to owner-directed changes, including templates for notices, change orders, and impact analyses. Train project managers and field supervisors to recognize early signals of scope pressure and to execute the company’s rights without compromising relationships. A well-practiced team can navigate owner-directed changes more smoothly, preserving margins, maintaining quality, and upholding long-term reputation for fair dealing and reliable delivery.