In the MEP contracting world, winning a bid is only half the battle. The real challenge is executing the construction project profitably. For many construction companies, profits bleed away not because of poor workmanship, but because of uncontrolled scope creep.
When a client asks for a seemingly minor change or adds new requirements mid-installation, it can completely derail your budget and schedule. This guide explores the impact of scope creep on your HVAC bids and provides actionable ways to avoid scope creep by mastering inclusions, exclusions, and formal change management.
What is Scope Creep and Why Does It Happen?
Scope creep happens when the project’s scope expands beyond the original scope without corresponding adjustments to time, cost, or resources. But what is the primary cause of scope creep?
Often, scope creep occurs because of a poorly defined scope of work during the early stages of project planning. If the project requirements are vague, the client might assume certain features are included. Another common cause scope issues is a lack of a formal change management procedure. When a project manager agrees to an added scope verbally without updating the project plan, scope creep in your projects begins to erode your margins.
If you have ever experienced scope creep, you know that even a small scope change can impact the project significantly. These changes to the project plan alter the original plans and project schedule, putting the entire project delivery at risk.
The First Line of Defense: The Scope Statement
To prevent scope creep, you must build ironclad scope boundaries. This starts with a highly detailed scope statement within your initial bid. A defined scope clearly outlines every single deliverable and establishes the project scope baseline.
- Inclusions: State exactly what the project team will provide. Do not just say “Install HVAC.” Say “Furnish and install three 5-ton rooftop units, including ductwork up to the first floor.”
- Exclusions: This is how you truly stop scope creep. Explicitly list what you are not doing. Exclude cutting and patching, structural reinforcement, or temporary heating.
By detailing the exact scope of a project, you establish a clear scope baseline. When new project requirements arise, you can easily point back to the original scope to prove that this new scope was not included in the original price. This simple scope management tactic is the best way to eliminate scope creep before the contract is even signed.
Implementing a Formal Change Management Plan
Even with a perfect estimate, changes to scope will happen. The goal isn’t to reject all changes of scope, but to manage scope profitably. To do this, you need a robust change management plan.
When a client initiates a change request, you must pause the work and initiate the change control process.
- Assess the Request: Determine how the new project additions affect the project timeline and budget.
- Document the Change: Never do work on a handshake. Enter the details into a change log.
- Formal Approval: Use a strict change order process. The client must sign off on the formal change before work begins.
A disciplined change process ensures that you are compensated for extra work. It protects your project schedule and ensures that scope creep is one less thing your estimators have to worry about.
Controlling Scope Creep Through Proactive Management
Managing scope creep requires ongoing vigilance. A successful management plan relies on modern project management practices.
Utilize project management software to monitor the project daily. By tracking the progress and project KPIs, the project manager can spot the early signs of scope creep. If labor hours are spiking in a specific area, it might be a result in scope creep that hasn’t been properly documented.
Controlling scope creep means adhering strictly to the scope management plan. When everyone on the team understands the scope of the project, the risk of scope creep drops dramatically. Remember, the risk of project failure caused by uncontrolled scope creep is entirely preventable. Scope creep in project management is a known variable; treating it seriously ensures ultimate project success.
Need Help Defining Your Scope?
Writing watertight inclusions and exclusions requires deep technical knowledge and years of estimating experience. Caused by scope creep, many contractors lose their hard-earned profits. If you want to ensure your bids are protected from the start, we can help.
Would you like to learn more about how our expert estimators at Chase Estimating craft bulletproof scope documents to protect your bottom line?
