Case Study: Houston Katy Freeway Expansion – Change Order Management Failures (2012)
Project Overview
• Name: Katy Freeway Expansion
• Location: Houston, Texas
• Year: 2012
• Project Size: $2.8 billion
• Scope: Widening and reconstruction of a major interstate freeway
• Lead Agencies/Contractors: Texas Department of Transportation (TxDOT), Multiple Contractors
Category of the Issue, Problem, or Challenge
• Contract Change Order
• Project Management
Summary of the Issue, Problem, or Challenge
During construction, a high volume of poorly documented change orders led to significant delays and cost overruns. Lack of standardized processes and inconsistent communication resulted in disputes and inefficient approvals.
Root Cause Analysis
- Absence of a centralized change order tracking system.
- Vague contract language regarding scope changes.
- Poor communication between contractors, subcontractors, and owner representatives.
- Inadequate documentation and justification for change requests.
Impacts Due to the Issue, Problem, or Challenge
• Project delays totaling 8 months.
• Cost overruns exceeding $90 million.
• Increased disputes and litigation risks.
Corrective Actions Taken
- Implemented a centralized digital change order management platform.
- Revised contract clauses to clarify scope and change processes.
- Established regular cross-team communication protocols.
- Mandated detailed documentation and justification for all change requests.
Lessons Learned
- Centralized and transparent change order management reduces disputes.
- Clear contract language mitigates ambiguity.
- Regular communication ensures timely and accurate processing.
- Proper documentation is essential for accountability.
Audit & Prevention: Project Control Questions to Ask on Future Projects to Help Control the Situation
- Is there a centralized system for tracking change orders?
- Are contract change clauses clear and comprehensive?
- Is communication among stakeholders regular and documented?
- Are change requests fully documented and justified?