CVE 4070 Construction Engineering Changes & Extra Work Prof. Ralph V. Locurcio, PE

Schedule changes… 10/1716Changes and Extra Work Change Order Handout 10/1917Claims and DisputesKerzner Ch-7 10/2418Value EngineeringKerzner Ch-14 10/2619Negotiations and Meetings Kerzner Ch-16 10/3120Project Closeout 11/221Change Order Exercise Due & Critique 11/722Test-2 & Critique

Registration info (not published)  CVE 4074/5074 – see Chris Monday for CRN  Leading Construction Operations  Syllabus: 1- Personal Leadership- your leadership style 2- Organizational Leadership- corporate style 3- Team Leadership- leading a team 4- Includes segment on ethics 5- 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…

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…

Change order request… Proceed to Approval

Change order approval… 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