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