Every contractor is familiar with the terms “Change Proposal” and “Change Order”. They are rather commonly used by a contractor or by someone who has a house or office built a number of times. It is quite natural for there to be changes in plan when there is a construction going on and it can be for various reasons.
A Change Proposal
A change proposal is a overview or scope of work for changes to a project for agreement between the contractor and the client . It is important that the change proposal clearly specifies everything and is submitted as soon as the changes being discussed are known so the Change Order can be constructed. It is important to get this document as well as the Change Order signed by the client/owner before going ahead with the changes.
A Change Order
Once there is agreement on the overview or the Change Proposal of the changes, the Change order is the document that lists the detail of changes in the scope of the project and its impact on the site condition, design and even the schedule of the project. For it to be valid there is a need for both the contractor and owner to give their consent. You will find it created for anything the client wants to change about the project or changes that the contractor finds necessary to complete the project properly like changing the location of the wall, adding another door that was not in the initial plan or moving a particular design elsewhere. Along with new additions, a change order can have deletion of certain structures from the original plan. Most often change orders are a part of construction projects and therefore it is important that you realize their importance. In short, whenever there is a change in the scope of work mentioned in the contract, the contactor has to make a change order and get it signed by the owner/client. This would make both the parties prepare for the change in pricing involved.
What should the Change Order Form contain?
Ideally, the change order form should have the following things mentioned on it:
- The contract no
- Name of the owner and his contact details
- Name of the prime contractor and his contact details
- Name and address of the project
- Name and contact details of the contractor
- Change order number
- A detailed description of the change to be made as opposed the original plan
- Item-wise cost involved
- Total cost of the change to be made
- How the proposed change would affect the project completion schedule
Photos, drawings, and descriptions should also be attached so that you can explain the change in a clear manner. Adding as much information as possible will be helpful for you in the future.
The cost involved in the change
The contractor needs to specify the cost of the change in the project. There can be extra charges or even reduction in cost sometimes. It is essential to have all the details mentioned in the change order including the labor and material cost involved. How much the project would cost you after the changes must be stated. Cost estimating software will assist greatly in giving you the costs for the change and the proper presentation of the document.
The new schedule
It is obvious that when there is a change in construction, there will be a change in the schedule as well. What the contractor has promised the project owner is not applicable anymore. As a contractor, you must clearly mention the number of days you would need to complete the proposed project. Your date of completion should also be specified.
How to Tackle a Change Order?
Now, it is time to look at the time frame of submitting a Change Order by a contractor Amount of Time for a Contractor to Submit a Change Order Usually, the change in the scope of work should be informed within a specified time frame. The time period of notification does vary from one contract to another, but it is important that you stick to the time line. Make a note of the date when the notice for the change was made and when you submit the change order. From the contractor’s perspective, the owner has to be notified as soon as possible, immediately to 10 days, depending on the size of the project. In case, there is no information, or the processing is done poorly, there are chances of the change order being rejected by the owner or the payment getting stuck. Therefore, it is important that both client and contractor have a complete understanding of how and when you should submit a change order, and this should be agreed upon before the start of the project. Timely submission is not enough. You must be careful about it containing all the necessary information, so everything is made clear. [/vc_column_text][/vc_column][/vc_row]
