Key Takeaways
- Prevention controls (planning, inspection) are 5-10x more cost-effective than response controls (dispute resolution, rework).
- Hidden conditions (60-80% of overruns), late decisions (20% of delays), and material lead times (30% of delays) are the three biggest risks.
- Formal change order management with escalation thresholds prevents uncontrolled scope and budget expansion.
- Risk transfer tools (insurance, bonds, warranties) are cost-effective for projects exceeding $50K-$100K in scope.
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Test Your Knowledge
1.What percentage of renovation budget overruns are caused by hidden conditions?
2.At what change order threshold should a comprehensive project feasibility review be triggered?
3.Which dispute resolution method has a 70-80% resolution rate and is typically required before litigation?