3 Key Factors that Impact Change Order Pricing

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["b"],["a",["href","https:\/\/www.aiacontracts.org\/contract-documents\/155046-change-order-contractor-subcontractor-version"]],["a",["href","https:\/\/www.aiacontracts.org\/contract-documents\/19786-change-order-design-build"]],["i"]],"sections":[[1,"p",[[0,[],0,"August 17, 2022"]]],[1,"p",[[0,[],0,"It is not uncommon to have changes to the scope of work\nafter the commencement of construction. This article will identify key factors that\nmay impact the Contractor\u2019s pricing when requesting changes during the\nperformance of construction on your project. "]]],[1,"p",[[0,[0],1,"Change in Materials or Addition of New Materials \u2013 Lead\nTimes and Alternate Options"]]],[1,"p",[[0,[],0,"When the change involves a change in materials or the\naddition of new materials, there are a few factors that may increase your\nchange order pricing or require you to consider an alternate material to reduce\nthe impact your change order pricing. \nFirst, the material may have a lead time. A lead time is the time between when the\nproduct is ordered to the time the product arrives on the project. This duration\nmay be short or long, depending on material availability, the location from\nwhich the material will be shipped, or time that it may take to custom build a\nspecialty material or product for your project. Any one or a number of these\nfactors may complicate the material procurement process and increase your change\norder pricing. If there is an alternative material or product that accomplishes\nthe same function and aesthetic while decreasing the price impact of the change\norder, you may want to suggest it as an alternate option."]]],[1,"p",[[0,[0],1,"Timing of Change Order Requests \u2013 Access to Impacted Areas"]]],[1,"p",[[0,[],0,"The change order request may require additional work in\nareas of the building that are already complete. For example, change order requests for new gas\nlines, electrical components, doors, or windows may mean that the change order\npricing would now include removing sections of work that have already been\ncompleted in order to perform the new work. There may also be exterior sections\nof the work that need to be modified in order to complete the change order work.\nTiming of the change order request may have a significant impact on the change\norder pricing."]]],[1,"p",[[0,[0],1,"Schedule Impacts \u2013 Loss in Productivity"]]],[1,"p",[[0,[],0,"The change order request may lead to a loss in productivity\nthat impacts the project schedule and pricing. For example, you may have a\ncertain set of crew members and equipment planned for the original scope of\nwork activity on the project. The change order request may require you to shift\nthose resources to another activity, resulting in a loss of productivity in the\noriginal scope of work. The loss in\nproductivity may then lead to longer durations for the work and increased labor\nand equipment needs amongst several scheduled activities. Additionally, if the change order request extends\nthe duration of a critical path activity in your schedule, and you are unable\nto find efficiencies elsewhere, you may see an increase in your total project\nduration and a commensurate increase to the Contract Sum to cover the extended\nduration of the work. "]]],[1,"p",[[0,[],0,"The AIA offers many different change order documents such as\nthe "],[0,[1],1,"G701S\u20132017\nChange Order, Contractor-Subcontractor Version"],[0,[],0,", "],[0,[2],1,"G741-2015\nChange Order, Design-Build "],[0,[],0,"and others to help you manage change orders on\nyour project."]]],[1,"p",[[0,[3],1,"AIA Contract Documents has\nprovided this article for general informational purposes only. The information\nprovided is not legal opinion or legal advice and does not create an\nattorney-client relationship of any kind. This article is also not intended to\nprovide guidance as to how project parties should interpret their specific\ncontracts or resolve contract disputes, as those decisions will need to be made\nin consultation with legal counsel, insurance counsel, and other professionals,\nand based upon a multitude of factors. "]]]]}