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CVE 4070
Construction EngineeringChanges & Extra WorkProf. Ralph V. Locurcio, PE
Schedule changes…10/17 16 Changes and Extra Work Change Order Handout 10/19 17 Claims and Disputes Kerzner Ch-710/24 18 Value Engineering Kerzner Ch-1410/26 19 Negotiations and Meetings Kerzner Ch-16 10/31 20 Project Closeout11/2 21 Change Order Exercise Due & Critique11/7 22 Test-2 & Critique
Registration info (not published) CVE 4074/5074 – see Chris Monday for CRN Leading Construction Operations Syllabus:
1- Personal Leadership- your leadership style2- Organizational Leadership- corporate style3- Team Leadership- leading a team4- Includes segment on ethics5- Includes professional communications
Change order defined… A written agreement to modify, add to
or otherwise alter the work, timing or payment set forth in the original contract documents, for an agreed upon sum or compensation, which is signed by both parties to the original agreement.
Reasons for changes… Change of purpose or need… Changes to methods or manner of work... Correct errors or omissions… Differing site conditions… Value engineering… Contractor suggestions… Almost any other reason not envisioned when
the original contract was written.
Timing of changes…
41 2 3 5
Advertising Date
Bids Opened
Award Date
Sign Contract
Changes byAddenda to
Contract DocsNo Changes Changes by
Change Order
Construction Begins
Types of change orders… Oral change orders Written and/or directed change orders Bilateral change orders Unilateral change orders Constructive change orders
Oral change order… An oral directive to accomplish work that is
not part of the original scope of work. May be issued by the owner’s rep or other
party representing the owner. May be precluded by the contract, but will
be upheld in court if the contractor performs work that is accepted.
Very dangerous because terms may not be clear, conditions may change, memories may differ as to what was agreed.
Written or directed change… A formal document directing a change
in scope or method. Generally bilateral, but not essential. Becomes part of the contract. Issued before work is accomplished. Parties agree on specific scope and
associated costs. Culminated by “notice to proceed”. Signed by parties authorized by the
owner and builder.
Unilateral change… Used in emergency situations or when
time does not permit a fully processed bilateral change.
May be issued over builder’s protest. May be backed by law in government
contracts. Intended to expedite a necessary
change to the contract. Must be replaced by a written bi-
lateral change
Bilateral change… Both parties agree to the scope and
terms of the agreement. The normal or desired form of
change.
Constructive change… An “informal” act that authorizes or
directs a modification to the contract. May be act of commission or omission. Must be claimed in writing by the
contractor within a specified time (usually 10 days).
These are a major source of disputes.
Situations for constructive change… Engineer’s interpretation of work. Improper inspection or rejection. Impossibility or impracticability of
performance. Unclear/conflicting contract documents. Owner fails to decide in timely manner. Unclear standards of work.
Change order process… Identification of need for change
May be initiated by owner or contractor Initiator prepares detailed scope Justification for change is approved by
owner Submitted to designer of record for
approval Cost of change is negotiated Owner agrees & signs change document Notice to proceed is issued to contractor
Change order process…
YES
Owner or EngineerInitiates Need for Change
Owner’s Representative ReviewsDraft Change & Submits to PM
PM Reviews & Sends to Engineer of Record for
Recommendation
ChangeRecommended
Contractor Initiates Need for Change
Owner or EngineerPrep Draft Change Order
Owner or EngineerPrep Draft Change Order
Engineer of Record Reviews Makes Recommendation to
PM & Owner
NO
PM Prepares Change Docs
PM Requests Price Proposal
Disapprove & Return to Contractor
Contractor PreparesCost Estimate
Owner’s RepresenatativeNegotiates Final Price
Engineer PreparesOwner’s Estimate
Owner Signs
Change
Owner’s RepresenatativeIssues NTP to Contractor
Change order request…
YES
Owner or EngineerInitiates Need for Change
Owner’s Representative ReviewsDraft Change & Submits to PM
PM Reviews & Sends to Engineer of Record for
Recommendation
ChangeRecommended
Contractor Initiates Need for Change
Owner or EngineerPrep Draft Change Order
Owner or EngineerPrep Draft Change Order
Engineer of Record Reviews Makes Recommendation to
PM & Owner
NO
Disapprove & Return to
Contractor
Proceed to Approval
Change order approval…
PM Prepares Change Docs
PM Requests Price Proposal
Contractor PreparesCost Estimate
Owner’s RepresenatativeNegotiates Final Price
Engineer PreparesOwner’s Estimate
Owner Signs
Change
Owner’s RepresenatativeIssues NTP to Contractor
Begin Approval Process
Change order cost estimate… Study the plans Organize your estimate Determine critical dimensions Determine critical materials & methods Determine take off quantities Calculate the cost of each quantity Add overhead & profit Negotiate with the contractor
Impact costs… Unforeseen costs that impact the progress
of work as a result of the change, but are not calculated, or agreed to, at the time that the change is made.
Usually expressed as a claim for additional work at the end of a contract.
Some contracts may preclude these, but courts may honor them if actual costs or burden can be proven.
Last slide… Handouts:
Change Order Cost Estimate