change order


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change order

A written order from the owner, architect, engineer, or  other authorized person to depart from previously agreed upon plans and specifications for construction. Change order management is a critical aspect of any construction job, as change orders frequently change the cost of the job, usually in an amount in excess of what might otherwise be expected. Many subcontractors bid jobs at break-even prices in order to secure the work, confident that numerous change orders will provide the profit necessary.

Example:  An electrician might contract to perform all wiring and electrical work for a home for $2,000. Additional outlets added by change order might be billed at $65 each, even though the additional labor and materials might amount to only $5 each.

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Change orders disrupt the schedules, cost more to administer, stress the client, and delay the job.
AMR performed work as directed by the owner, the owner performed some of the contractor's scope of work, and the owner paid AMR for additional work or deducted for work the owner's forces performed --all without a written change order signed by the parties as the terms of the agreement required.
Change orders have an even more pronounced impact when it comes to fixed-price, lump-sum contracts.
The owner should not be obligated to pay for any additional work without prior authorization by change order or other mutually accepted written directive.
The additional cost for the change order would be approximately $100,550.
KBR has been in negotiation of these change orders since late 2009.
34) Once a cardinal change has been demonstrated, this should "trump" any release in a specific change order.
Apparently, a change order can be issued only when the work is related to an existing project.
2) Contractors can immediately bill 80% of this estimate, pending final issuance of the change order.
Using a time-and-materials pricing system makes it easy for everyone to estimate what a change order is going to cost.
MOST BUILDERS MANAGE CHANGE ORDERS as a hodgepodge of verbal communications, faxes, and disparate Microsoft Excel spreadsheets stored in the local hard drives of their construction supers and office staffs.