Updated Change Order Guidelines: Quick Reference Guide (2022)
Change orders are an essential part of every construction project. These are issued to accommodate changes to the construction contract.
We suggest you thoroughly review and negotiate your contract terms prior to execution. Having clear and concise terms that both you and your client agree to, will help shape the expectations and guide the performance of your duties. Contracts often dictate change order procedures, allowable markups, liquidated damages, and situations where extra costs incurred by the subcontractor are not reimbursable. Payment terms flow through to change orders. Understand how they may affect your change request. Prior negotiation and knowledge of your contract terms will aid in the flow and process of equitable contract modifications.
Electrical contractors are routinely asked to prepare change order proposals on construction projects. The single most common area of dispute in the change order process is its cost. Among cost-related disputes, items related to recoverable direct cost, overhead-profit %, and impact factors resulting in consequential costs constitute a vast majority of the disagreements. The purpose of this Change Order Guidelines is to provide a fair and reasonable process for the costing and pricing of change orders.