Supplemental Topic

Following the
Change Order Process

Contents

Introduction to Change Orders ...... 4

Who’s Involved in Change Orders?...... 4

What is the Change Order Process?...... 5

Change Order Process Timing ...... 8

The Importance of Timing...... 8

The Change Order Process: Project Administration’s Steps...... 8

Initiating a Change ...... 8

Reasons for Change...... 9

Verifying Need and Funding Availability...... 9

Assessing the Level of Urgency...... 9

Processing Standard Change Orders ...... 10

Preparing the Bulletin...... 11

Reviewing the Contractor’s Proposal...... 14

Reviewing Requests for Time Extension...... 14

Responding to the Proposal...... 15

Completing the Change Order Form...... 15

Signing and Delivering the Change Order Form ...... 19

Processing Change Orders Internally...... 19

About the A-600 Form...... 19

Completing the A-600 Form...... 20

Does Your Change Order Require an A-910? ...... 23

Completing the A-910 Form ...... 25

Assembling Change Order Documents for Processing ...... 29

What Happens Next? Approval/Accounting Processes...... 30

Steps in Capital Projects Reporting...... 30

Steps in Capital Finance...... 31

A-600 Form...... 31

Change Order Form...... 31

Supporting Documentation...... 31

Processing Emergency Change Orders...... 32

Completing the Emergency Field Work Order...... 33

Processing Amendments...... 35

Figures

1Change Order Bulletin

2aBlank ChangeOrder Form

2bCompleted Change Order Form

3A-600 Form

4A-910Form

5Emergency Field Work Order (EFWO)

6Amendment

Table

When Does a ChangeOrder Require Approval Routing?

Chart

Change Order Process Flow

Changes to Following the Change Order Process

Revision 1, June 2002

Changes made as part of this revision appear with a in the margin.

Page / Description/Reason
23 / Text change: Change Orders now require approval routing when the cost of a Change Order on a contract exceeds $1.210 million, or if the Change Order causes a threshold of $1.210 million to be crossed.
24 / Table change: Throughout the table “When Does a Change Order Require Approval Routing?”, examples were changed to reflect the new $1.210 million approval amount.
30 / Text change: Two items in the bulleted list were revised to reflect the new approval amount.

Introduction to Change Orders

Changes to contractual agreements can become necessary at any time in the life of a project. Between the signing of the original contract and the completion of work, literally dozens of changes to a project’s scope of work, schedule, and/or budget can be requested.

The University Architect Division has developed a process for managing these project changes. When followed, the process helps balance the need to keep project work moving forward against some equally important internal needs:

  • The need to ensure that contract changes are properly and legally approved
  • The need to keep account information up to date
  • The need to pay vendors promptly

This document presents the University Architect Division’s process for managing Change Orders.

Who’s Involved in Change Orders?

The following areas are involved in processing change orders:

Project Administration initiates change orders and communicates with vendors. Project Administration also initiates the processes that move a Change Order through its internal approval and accounting steps.

For purposes of this document, the term “Project Administration” encompasses the Project Administrator; the Associate Architect, if applicable; the Senior Staff Engineer; support staff members; and others in Construction Management, as applicable. The term “Architect” in this document refers to either the Associate or the in-house Architect.

Capital Projects Reporting checks documentation on Change Orders that require routing for contract approval. This documentation includes the A910 Form, Change Order documents, and supporting information.

Capital Finance checks Change Order documentation, determines whether sufficient funds are available for the change, and updates the account information in the College and University Financial System (CUFS) and the Office of the Architect Shared Information System (OASIS).

University Purchasing ultimately authorizes the vendor to include the Change Order in the vendor’s payment application.

What Is the Change Order Process?

The following is an overview of all parties’ steps in the Change Order Process (for non-emergency changes to Construction contracts):

  1. When a change to contracted work is requested, the Project Administrator or Associate Architect (as applicable) confirms that the change is needed and that sufficient funding is available in the project budget.
  2. The Architect provides details about the change to the Construction Contractor in a Bulletin or other appropriate means as determined by the Project Administrator.
  3. From the Bulletin, the Construction Contractor develops a proposal (including cost) to complete the change work.
  4. The Project Administrator and/or Architect review and respond to the proposal, checking it for conformance to University pricing requirements and conducting negotiations as necessary. (Due to the nature of the additional work, or a lack of agreement on pricing, a “not to exceed” Change Order shall be processed before work begins.)
  5. Using the pricing in the Construction Contractor’s proposal, the Architect (or Senior Staff Engineer [SSE], depending on contractual responsibilities) prepares the Change Order Form. The Architect, Project Administrator, Senior Staff Engineer, and Construction Contractor sign the Change Order Form.
  6. The Senior Staff Engineer oversees completion of the A-600 Form. This form provides accounting personnel with the information they need to enter the funding change into CUFS. Ultimately the A-600 will be provided to the vendor as authorization to bill for the change work.
  7. The Project Administrator determines whether the Change Order requires contract approval and routing. If so, the Project Administrator completes the A-910 form, which summarizes the contract change for the individuals who will need to sign it.
  8. The Project Administrator assembles the Change Order Form, the A600, the supporting documentation (such as the Contractor’s proposal), and the A910 form (if required), and submits them for approval and qualityassurance steps.
  9. If contract approval is required, Capital Projects Reporting checks the Change Order paperwork for accuracy, and the package is routed for signatures.
  10. The Accountant checks the Change Order paperwork for accuracy, enters the Change Order funding information into OASIS and CUFS, and approves the A-600 Form.
  11. Capital Finance sends the A-600 form (and supporting documents) to University Purchasing. Purchasing issues a copy of the A-600 to the vendor as authorization to begin billing.

Note:The above steps apply to “standard”, or non-emergency, changes to Construction Contracts. Throughout this document, a standard Change Order for Construction is used as an example.

In emergency cases, a shorter process can be followed so that urgently needed work can begin immediately. See the section titled “Determining the Level of Urgency” for information about emergency changes.
Changes to Architect/Engineer (A/E) agreements follow a similar process, but the document that begins the process is called an Amendment rather than a Change Order. Amendments are discussed later in this document (see “Processing Amendments”).

The chart on the following page illustrates the Change Order Process.


Change Order Process Timing

The Change Order Process can be completed in less than 14 days for uncomplicated issues. In no case should it take more than 60 days.

The Importance of Timing

Timing is crucial to successful change order processing. Each step depends on the step that precedes it, so each party must fulfill his or her responsibilities as quickly as possible to prevent the process from becoming stalled. Delays in change order processing can have serious consequences, including:

  • Construction work beginning (or even being completed) before it has been authorized by Project Administration and/or approved by the University. This situation is in conflict with University and State requirements and exposes the University to unnecessary risk.
  • Vendors submitting invoices before work has been approved. This situation can create delays in paying vendors, which in turn can damage the University’s relations with its vendors.
  • Internal accounting processes compromised because events have happened “out of order”—i.e., invoices for Change Order work have been presented before funds have been committed to the work.

Prompt completion of each step in the Change Order Process helps ensure that changes are properly authorized and approved before work begins; that vendors are paid promptly; and that accounting processes follow established norms.

The Change Order Process:
Project Administration’s Steps

Initiating a Change

Depending on the reason, a change may be initiated by the Project Administrator or by the Architect. Most changes are initiated by the University, but in some circumstances an outside Architect might initiate a change (for example, if the University Owner/Client communicates a change request to the Architect without first discussing it with the Project Administrator).

Reasons for Change

Any of the following situations can necessitate a change or changes to a project’s scope of work, schedule, and/or budget:

  • An Owner request. In this case, the project’s Owner/Client asks for a change after the contract has been signed and/or after construction work has begun.
  • An initial error or omission by the Architect. In this case, the change is needed because the error or omission has rendered original information incorrect or incomplete.
  • An unforeseen field condition that makes the change necessary.
  • A field dispute between the Construction Contractor and the University and/or Architect. When such a dispute is resolved, a change may be needed to satisfy the resolution.
  • Value engineering. In this case, the parties have identified and agreed to an alternative way to do the work, at a lower cost.
  • Reconciliation. In this case, money remains in a completed Purchase Order and needs to be deducted.

Verifying Need and Funding Availability

For each potential change, the Architect must confirm with the Project Administrator that the request is valid and that currently available funding will cover the estimated cost of the proposed change.

Available funds must be sufficient to cover both construction costs and any additional costs for the Architect’s services (whether inside or outside design services are used). A contract amendment must be processed for changes to A/E agreements (see “Processing Amendments”).

Once the need and the availability of funds have been established, Project Administration must determine whether the need for the change constitutes an emergency.

Assessing the Level of Urgency

If a change is considered an “emergency,” most often because of an unforeseen condition in the field, a variation of the usual Change Order Process can be invoked to allow work to begin sooner. The determination of emergency need is at the Project Administrator’s discretion and can be an important option for preventing costly delays in construction. However, most changes are not emergencies.

Three variations of the Change Order Process can be used; the choice depends on how urgently the change is needed. The table below shows which variation to use, based on level of urgency and estimated cost of the change:

Level of Urgency / Estimated Cost
of Change / Process Variation
Non-emergency
(most changes) / Any / Standard Change Order
Emergency (i.e., the change is needed to address unforeseen conditions) / More than $10,000 / Emergency Change Order
$10,000 or less / Emergency Field Work Order (EFWO)

The standard Change Order approach is preferred whenever project conditions permit it. The sections that follow present the steps in the standard approach. “Emergency” procedures are presented in the section titled “Processing Emergency Change Orders”.

Processing Standard Change Orders

Project Administration’s steps in the standard Change Order process are as follows:

  • Preparing the Bulletin;
  • Reviewing the Contractor’s proposal;
  • Responding to the proposal;
  • Completing the Change Order Form; and
  • Processing the Change Order internally (this step includes completing the A-600 and A-910 forms as required and preparing the Change Order documentation for internal checking and approvals).

Each step is explained in detail in the sections that follow.

Preparing the Bulletin

After confirming with the Project Administrator that the change is needed and funding is available, the Architect prepares the Bulletin. (The Project Administrator is the University representative assigned to the project to consult with the external architect, if one is used.) The Bulletin’s purpose is to give the Contractor enough information about the proposed change to develop a proposal and cost estimate. To that end, the Bulletin should include the following elements:

  • A detailed scope of work describing the proposed change;
  • Drawings, if any, that illustrate the proposed change;
  • The Architect or Project Administrator’s preliminary estimate of the cost to make the change, and the University’s preferred pricing basis (fixed-price or time-and-materials) for the work;
  • The deadline by which the Contractor must respond to the Bulletin (10 working days); and
  • A cover letter that summarizes the information in the Bulletin and provides justification for the change.

The University’s Change Order Procedure and Pricing Guidelines state that Construction Contractors can be held responsible for costs that may result from their late response to a Bulletin. The Bulletin should make this point clear to the Contractor.

Figure 1 shows an example Bulletin. Some A/E firms working on University projects have developed their own formats for Change Order Bulletins. Alternative formats are acceptable as long as the Bulletin provides the Contractor with enough information to respond in a timely fashion with a proposal.

Note:The cover letter should be used to remind the Contractor that the Bulletin is not an authorization to proceed with construction work. The Change Order Procedure and Pricing Guidelines provide that when Construction Contractors undertake work without the required authorization, they assume the risk that they might not be paid for such work.

After developing the Bulletin, the Architect next obtains the Project Administrator’s approval of the Bulletin and cover letter and forwards them to the Construction Contractor.


Reviewing the Contractor’s Proposal

When the Construction Contractor returns a proposal in response to a Bulletin, the Architect reviews it to determine the following:

  • Did the Construction Contractor follow the University’s requested pricing basis (either fixed-fee or time-and-materials) in estimating the price to perform the work?
  • Does the Construction Contractor’s item-by-item pricing conform to the limits established in the University’s Change Order Procedure and Pricing Guidelines?
  • Is the Contractor’s total quoted price reasonable?

A “no” answer to any of these questions constitutes a reason to reject the proposal. If the proposal is priced by the wrong method or does not conform to the published guidelines, the Architect should ask the Construction Contractor to correct the pricing errors and resubmit the proposal. If the Contractor’s total price is deemed unreasonable, the Architect and/or Project Administrator should initiate price negotiations with the Contractor.

Note:The University’s Change Order Pricing Guidelines are available to Construction Contractors via the University Architect Division’s Web site ( In addition, a worksheet to assist with line-item pricing of Change Orders is available in electronic format to Contractors who request it.

Note: When evaluating contracts and negotiating pricing, remember that the Change Order Process must continue moving forward. To complete Project Administration’s part in the process as quickly as possible, it is important not to spend too much time on any single step.

Reviewing Requests for Time Extension

The Construction Contractor’s proposal may include a request for more time to complete the added work. If the change is substantial, a request for an extension may be entirely reasonable. However, because timing is an element of the original contract, any change to the project schedule constitutes a contract change that must be documented on a Change Order Form.

Note:A Construction Contractor’s request for more time to complete the work can come at any time in the Change Order Process. If the request is made with the Contractor’s proposal, or at any time before the Architect/Project Administrator has prepared the Change Order Form, the change in timing, if approved by the Project Administrator, can be documented on the same Change Order Form as the change in scope. However, it is also acceptable to prepare a separate Change Order Form for the time extension.

Requests for time extension are subject to the criteria presented in paragraph GC 7.4 of the Front-End Specifications.

Responding to the Proposal

As soon as possible after receiving the Construction Contractor’s proposal for performing the change work, the Architect (with the Project Administrator’s concurrence) must accept or reject the proposal and notify the Construction Contractor of the decision. If the proposal is rejected, the Architect must provide written explanation to the Contractor (even if price negotiations with the Contractor are ongoing).

Completing the Change Order Form

Once the terms of the Construction Contractor’s proposal are acceptable to the University, and assuming the Architect and Project Administrator still agree that the change is needed, the Architect can complete the Change Order Form. This document, once signed by all parties, can be given to the Contractor as authorization to begin the change work.

As part of its normal processing, the completed Change Order Form will be checked by the Capital Projects Reporting and/or Capital Finance departments, as applicable. (See the section “What Happens Next? Approval/Accounting Processes” for an explanation of these checks.)