Lesson 10 Change Order

Question 1

What is change order?

Answer 1

Formal procedure

Legally binding contract modification

Detailed examination of change components

Question 2

What is change directive?

Answer 2

Immediate implementation

Provisional in nature

Cost and schedule TBD

Question 3

Contractor route to Request Change

Answer 3

Give notice.

Prepare detailed claim (soon)

Negotiate and Sign

Proceed to implement

Question 4

10 Rules For Successful Claiming

Answer 4

1- Know the contract / documents
2- Don’t give up your leverage
3- Get it in writing & signed
4- Lawyers won’t bail you out
5- Ask compensation
6- Time (=Money)
7- Don’t surprise the client
8- Persistence gets results
9- Your bargaining power is equal to that of others
10. Your job is done - payment

Question 5

Cost Components of a Claim

Answer 5

Labour (Human) & Equipment ( Machines )
Materials
Overhead
Profit
Other

Question 6

Cost component of a claim (Diagram).

Answer 6

CHANGE ORDER (CO) COSTS
- DIRECT COSTS
- DIRECT LABOUR, MATERIAL AND EQUIPMENT COSTS
- JOB COST / EXPENSES RELATED TO CO

 - INDIRECT COSTS/OH-P
       - OVERHEAD EXPENSES
       - PROFIT
 - IMPACT FACTORS CONSEQUENTIAL COSTS
        - LOST LABOUR PRODUCTIVITY COSTS
        - OTHER ADDED COSTS
        - PROJECT DELAY CLAIMS AND COSTS

Question 7

Law of Diminishing Returns

Answer 7

The diagram regarding the number of cooks. Adding another cook is not helping lit it used to