Test #3 Flashcards
What is a change order?
A written order to the contractor that has been signed by the architect and owner, issued after the contract has been signed. Authorizes changes in the scope of work or an adjustment of price
Who can initiate a change order?
Owner/Architect for changes in materials, finishes, and addition in work
Contractor/Subcontractor: change resulting from RFI’s, better material, value engineering
Supplier: changes in codes/regulations, materials no longer available
What is the CO process?
Change noted, architect prepares sketch/directive to the contractor. Then contractor prepares an estimate and time extension. The architect and owner review the estimate. Contractor notified of acceptance. Then formal change order paperwork follows
Why should the PM push for the formal CO paperwork after approval?
If they don’t have the CO documentation and it’s approved can’t bill for it. Also need the formal documentation of the contract adjustment
What is a Construction Change Directive
A written order prepared by the architect and signed by the owner directing a change in the work prior to an agreement on costs affecting the contract or the contract completion time
Why use a CCD instead of a change order?
There is not sufficient time to pursue the normal CO route. Can’t agree on price or time extension needed.
Why do Change Orders cause problems and frustration?
Permit non-competitive pricing. Cost is often an issue. May have an adverse impact on schedule. May affect productivity.
What is Quantum Meruit?
GC must prove that the owner benefited by the CO work. Recovery of costs is based on owner’s implied promise to pay for benefit received by CO work
What is Unjust Enrichment?
Based on a GC claim that the owner has been enriched by CO work. “You can’t get something for nothing”
What are liquidated damages?
Liquidated damages are damages associated with not completing a project on time. It is a stipulated cost normally done per day and agreed upon by both parties in the contract
What are actual damages?
Actual damages are damages from things like extending the rent at the current location they are in, including utilities. Also, actual damages are the actual damages they lost because the project didn’t open as planned.
What are some Change Order costs due to job delays?
Excusable- the general contractor granted time extension, but no extra money.
Concurrent- neither owner nor GC collect money for damages
Compensable- owner or GC is entitled for additional compensation.
What are the benefits of project documentation?
Create a project history. Permits reliance on more than just memory. Reduces misunderstandings, disagreement and disputes. Aids in the legal battle that could happen.
When documenting a project make sure to include:
What, when and how it happened. When was it discovered? Can responsibility be assigned? What is the impact? What action is required? Who needs to know? What is responsible for solving the problem?
What are the 2 primary purposes of cost documentation?
Transmit the information to the accounting department. Provide information for cost control.
How often should you send documentation to the owner?
Depends on the contractual relationship, business relationship, owner preference, A/E strength and contractual relationship, knowledge and trustworthiness of owner
What is the purpose of a meeting?
Inform the people participating, find solutions to the problems, communicate and coordinate.
What should you do for an effective meeting?
Make an agenda, determine who should be at the meeting, determine the location, time and length of the meeting
