“Scope Creep” is not a new phenomenon. You’ve probably been guilty of moving a contractor off the contract terms yourself. Here is how to recognize it, and how to stop it. The best method is to have a clearly written scope of work, and stick to it. Handle deviations from the scope as they arise using changes to the scope (i.e., change orders). Read my article on scope of work HERE.
What Is Scope Creep?
Not a very “legalistic” term, I know. But it’s real. Scope creep is a deviation from the original, contracted-for specifications for a project. It may be intentional with an unscrupulous client. You may creep the scope yourself for some reason. We’ve all either pressured someone to do it, or been pressured to stray from the initial scope of work.
For example, you call a plumber to your home to fix the toilet. While he’s there you say to him, “So long as you’re here, can you take a look at the kitchen faucet?” Scope creep in its simplest form. Have you been on either side of this situation?
Types of Scope Creep
In my experience, I’ve seen two kinds of scope creep. The first is when a client asks for changes to the original scope of work in the contract. These are usually not nefarious, and generally there is a good reason for them.
You’re building out a commercial office space and the client decides that it wants the more expensive carpeting on the floor. A client asks you to design a website, then when it’s near completion the client asks you to add an e-commerce functionality to it.
Another example could be if a client asks you to manufacture component parts to a product; then later asks if you can assemble them.
What these all have in common are that the client is asking to change the initial scope of the project, possibly without the fee structure changing. Usually, the change comes with an additional cost to the contractor party.
Contractor’s Creeping Changes to the Scope
Sometimes the contractor may change the scope of the project, too. Often the contractor feels pressure to complete the changed scope of the project without charging the client, for “customer relations” reasons. That’s the contractor’s decision.
An excavating contractor sets a price to excavate a commercial property, thinking it’s going to be common dirt, only to find the property riddled with hidden boulders. The excavator decides to complete the project without charging extra for boulder excavation. A manufacturer determines that the initial called-for packaging for the product won’t properly protect it in transit. So the facility manager gives an upgraded packaging to the client.
How to Avoid Scope Creep and Get Paid
Some tips, everybody likes tips.
First, have a clearly written scope of work. That should always be the starting point for discussing scope changes.
Second, have a formal way to document all changes to the scope of work, including any increases in the project’s cost. “Change orders” in the construction field, you can call it add-ons, extras, it’s all the same. Document it for the client, and get their commitment to pay the additional costs. I have a remodeling client that uses “selection sheets” on which the customer acknowledges finish picks – carpeting, cabinets, flooring. If the client tries to upgrade (one had a client that insisted they chose hardwood floors instead of laminate), the contractor points out the initial, appoved selection, then quotes them for the upgrade.
Next, be clear and direct about scope creep. A simple, “Well, that’s not part of our original agreement but we’d be glad to put together a quote to add it into the contract.” Just like that. Or, “See, you selected this product and the one you want to change it to is an additional $xxx.” And whoever talks next loses. Best parts of this are (a) it lets the client know that it can’t get away with “as long as you’re here” add-ons; and (b) you’re not doing additional, unpaid work.
A Few More Tips
Another tip, that I use with my business clients, is to have *one* person on the client end who has authority to approve all changes, and who will communicate them with the contractor. I had a website design client that, in addition to a mushy scope of work, had to communicate with the client’s website design committee. Imagine fielding emails and phone calls from a dozen people, all of whom may or may not have authority to make changes to the product. You can have a committee, but I’m only working with one contact point. Let the contact point sift it out.
Next, if there are unknowns in the process, be clear about them up front. It’s your business, you should be able to see these when contracting. “Unknown site conditions” we call them in construction. The possibility of hidden boulders. Packaging for a custom made product, the cost of which may not be known until production time. The possibility of having to pay for expedited delivery on late-incoming orders.
Provide for a variable pricing structure if you see these coming. Have a written change order process in place. Put them in your scope of work as “estimates” or something, and point them out to the client when meeting to discuss the scope of work.
Last, be prepared to walk off the job if the client keeps asking for unpaid changes. It’s not worth the hassle. And don’t worry about the online reviews – we all recognize bad clients’ reviews when we see them.
Conclusion on Scope Creep
Before you get to worrying about scope creep, make sure your contracts are well-drafted from the get-go. Call me in Asheville, Hendersonville, Waynesville, and all of Western North Carolina for your contract drafting needs.
I can be reached at (312) 671-6453, or email me at palermo@palermolaw.com. Be sure to listen to my business law podcasts HERE.
