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Use best practices for change orders

On Behalf of | Sep 12, 2020 | Construction Law |

Despite recent construction delays, contractors need to avoid the temptation to perform work and deal with the change orders later. Timely notices, emails confirming changes, preserving rights and remedies and other best change order practices should continue to assure that a construction contractor does not lose money or legal rights.

If a written change order is impractical, a supervisor or field manager should send a field email to the customer after a request for change or extra work. The email should note that the customer directed additional work in the field, any additional cost, that additional costs will be priced out and that the work will be completed.

If any additional work was not covered in the contract, contractors should send a request for information to the general contractor, owner, architect, or other responsible party. The request needs to seek confirmation that the work is extra or at least clarify that there may be a dispute or a claim.

Subcontractors should also regularly review their contracts to assure that work that they are asked to perform by the general contractor is part of the scope of work in the general contract. If it is not covered by that clause, the subcontractor may ask for a change order.

Schedule extensions need approval through a change order. Otherwise, contractors may be liable for liquidated damages if the work is not completed by the contract deadline.

Recent social distancing rules and other precautions may also hinder and delay work and require a change order claim. Some of these delays may also come from other contractors or trades. Field superintendents and foremen should fully document these conditions in their daily logs to support these claims.

Some situations do not justify a change order. Delay claims or damages from an extended duration, more commonly known as a delay, may not support a change order.

Contractors should regularly review the budget against the actual figures in a job cost accounting system. Accountants may also perform contract review.

Most of all, contractors should fully understand their obligations under the contract and properly document and present their claims. An attorney can assist with these matters and review contracts to assure that a contractor’s rights are protected.