2B — January 26 - February 8, 2018 — Owners, Developers & Managers — M id A tlantic
Real Estate Journal
www.marejournal.com
O wners , D evelopers &M anagers By Caroline Shelly, LEED-AP+BD-C, HF Planners Change Order Protocol I recall being at the shore watching boats pull into dock. It is always remark-
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A change order is a just a technical term for modifica- tion to a construction contract. When you hear change order, think contract change. Why? Because a change order is a two-sided agreement between the parties involved on the contract. There are various reasons for the creation of a change order. For example, a design modification which may come in relation to potential im- provements to a design; or per- haps business changes which result in adjustments to the initial vision. Errors and omis- sions within the preliminary drawing set, and specifications may also cause change orders when the design firmmisses a
key detail. Unanticipated site conditions such as uncover- ing asbestos tile can result in added costs by the contractor. Facility Managers may also add to the scope or work and/ or reduce the scope of work depending on business needs. Adjustment to the schedule may cause either an accel- eration or deceleration to the work to accommodate unfore- seen needs. The sequencing of work may also impact a job resulting in a change order such as requiring a portion of the building to be completed before the entire job. Unit pricing may also cause adjust- ments to pricing due to un- foreseen circumstances such as gas shortages or natural disasters. Regardless, the rea- son to initiate a change order, it is important to document the amendment to the project in detail so it is processed in a fair, equitable, and timely fashion. A change order contractually alters an original agreement. It is key that all change or- ders must be approved by the Facility Manager. The change order should then be signed by the parties involved, whether it is the designer/architect or contractor. There should be sufficient detail describing the change; what is being changed, why extra work is be- ing done, the cost impact to the project and the revised total on the project. Once approved, the change order is part of the official plan, and specifications on the project. Disagreements are not un- usual because change orders affect each party involved in different ways, whether it is the contractor, design firm or Facility Manager. When developing a change order, it is imperative to keep the wording straightforward when describing the reason for the change(s). Detail should go into the impact the change has to the overall job, budget, and schedule. Overall, it should be the goal of both the facility manager and construction manager to reduce the number of change orders affecting the dollar amount as a percentage of the overall construction costs. Mark up on the change order should be in harmony with the contract previously agreed upon for overhead and profit. Backup paperwork should be included with the submittals along with the impact to the schedule. Ideally, a change order summary sheet should continue on next page
able to see wha t b o a t owners name their boats. A boat named “Change Or- der”, struck me as a little arrogant; if a change or-
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der is a blatant money maker to a contractor, it is likely a headache for the owner on a project. To a certain extent, it should be a vessel in which all professionals assigned to the project should learn from, and work together on. What is a Change Order?
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