What is “scope creep”?

On Behalf of | Mar 7, 2018 | Business Contracts and Leases

Most business owners at some point encounter clients who want to push the boundaries of the contractual obligations in their favor. Depending on the industry, they may ask for last-minute changes to blueprints or for the business owner to toss in some extra software packages after the deal’s been closed. In the industry, it’s often referred to as “scope creep,” and it’s a real problem.

While there is intrinsic value in keeping customers satisfied, if that satisfaction is eroding your bottom line, you need to reclaim your project’s boundaries. Below are some suggestions for doing so.

If you are determined to hold the line on the project, get it done as efficiently as possible and conclude the matter. If both client and contractor agree, you can draw up an early termination agreement to liquidate the contract. This allows you to cut ties and move on.

One way to do this by converting your agreement to “time and materials” as opposed to “fixed price, fixed deliverable.” As such, it will be completed in milestones, with subsequent phases based on evolving requirements.

Picking your battles is essential

Saying “no” to a client is generally not a good idea. For the 10 times that you agree to their requests, they are sure to recall only the single time that you said it just wasn’t feasible.

Don’t automatically reject clients’ requests out of hand. Explore ways that you could accommodate a request, the costs involved with doing so and why it just might not be possible, e.g., adding another bathroom would require removing a structurally supporting wall or rerouting plumbing.

Describe the effect of scope creep on your project. Explain that after construction ensues, it becomes cost-prohibitive to alter the plans substantially, and adding that feature is the financial equivalent of refinishing the floors and repainting the home.

Some instances of scope creep can be avoided by having a change process already included in the contract. If this contractually addressed by a clause that says any deviations from the plans will result in a 30 percent increase in costs, it’s far less likely clients will be clamoring for changes.

As always when dealing with contractual obligations, make sure that all contracts are subject to legal review by your Cincinnati attorney.

Source: The Workplace, “Dealing with clients who want more than what’s in the contract,” accessed March 02, 2018