Types of Change Orders
Change orders modify the original contract for scope, schedule, or cost changes. Directed changes are ordered by the owner through formal documents. Constructive changes result from actions that effectively change the scope without formal documentation. Differing site conditions constitute another category requiring change order processing.
Contract administration procedures.
Pricing Change Orders
Accurate pricing is critical for maintaining profitability. Common methods include lump sum pricing, unit price extensions, and time and material pricing. Pricing should include direct costs plus overhead and profit. Extended overhead costs should be included when changes extend project duration. change order pricing methods.
Documentation Requirements
Thorough documentation supports accurate pricing and prevents disputes. Daily reports should document conditions leading to changes. Correspondence logs track all communications. Change order logs track the status of pending, approved, and executed changes. change order pricing methods. change order pricing methods.
Dispute Prevention
Clear contract language defining the change order process prevents ambiguity. Contracts should specify time limits for notice, documentation requirements, and approval authorities. Alternative dispute resolution methods like mediation and arbitration provide faster resolution than litigation.