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The culture of change orders in the construction industry is an interesting mix of theory and practice. In most instances legitimate change orders should authorize additional work that could not have been foreseen by even the most astute or practiced professional when reviewing a FRQ/P (Request for Quotation / Proposal), be it local community, state or federal in orgin. Simply put, drawings, blueprints or on-site inspections cannot reveal in many instances all work necessary to complete a project. Many would argue the value of Change Orders are at best necessary evils; however, once burned, twice warned. Those professionals who know better appreciate the value of these instruments if used correctly and wisely on any job.

What concerns me about this article is the obvious; how or what procedure demands a Change Order be authorized and signed by the general contractor. What justifies a Change Order and what metrics should be used to define or control them? What are the parameters involved and who makes the rules or guidelines? In most instances a Change Order must specifically allow a sub to continue their work, correct the empty or false assumption, and proceed to complete the task at hand expeditiously. Yet, even reasonable people have been known to disagree.

A word to the wise here however. At no time should any sub contractor accept a vocal agreement to proceed as total authorization from the general or their managers. PLEASE STOP all work and get a SIGNED document before going forward. In the long run you will avoid later misery and suffering which translates into litigation, loss of money, and especially total waste of time. This is the voice of experience in this regard screaming in your ear in case you are questioning or wondering why. A life time of experience in many construction areas makes this sound advice and a factually correct suggestion.

I doubt any or even most will concur with this argument but discourse before hand is much better than lawsuits after the fact. Just a thought.

I can't follow your meaning.If the site contractor settled, why did he sue?

"The owner and CM settled with the site contractor. But when the site contractor sued the building contractor, the purported subcontract was ruled an unenforceable sham."

Live told us don’t struggle so much,best things happen when not expected. Did you agree with me?

Change orders are always an issue on any project, and I have almost never seen a project where there were no change orders at all. No amount of DD or site investigation can determine every possible issue that may arise during construction, especially once a contractor starts digging in the ground.

With the exception of some extreme cases, most change orders can be handled relatively simply. In very extreme instances, typically fault can be found with the design engineer and failure to peroform the necessary up front investigative work to determine a potential issue or the project owners withholding of pertinent information. If you put these instances to the side, I think there is a simple way to address the issue of change orders in the field that would not disrupt the flow of work.

A municipality that I used to do construction in had a very easy change order process governed by very simple rules. All change orders were paid for on a time and materials basis, whith set amounts of overhead and profit that could be requested. For example, a contractor was allowed to mark up material 10%, equipment 5% and labor 15%. That was a change order, required a very simple form and backup for any materials, labor and equipment used.

I then created a simple for to supliment this. It spelled out the work scope performed, listed the labor, material and equipment used and then had a sign off line for myself and the project inspector. Because often the project inspector does not have the authority to approve change orders, this form simply certified to the work that was performed, and the time and materials utilized for this work.

From that point on, the only conversation needed was whether or not this actuall qualified as a change order with respects to the actual contract. Final price was determined and certified by the site inspector based on the time and materials utilize to accomplish the task. If it was determined that the task should have been included in the original cost by the GC, then no payment was authorized and then I would have to take that up with my sub if there was one. If it was recognized as a change order, then payment was pretty simple.

I don't like caps on total change orders since their magnitude can never be determined until they are encountered, and then public bidding of them can be inefficent and not have any effect on the final price for the task.

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