Change Orders – Setting Change Orders – Setting Expectations Expectations

• Change orders, as a % of construction cost, increase Change orders, as a % of construction cost, increase as the contract amount decreasesas the contract amount decreases

• Change orders, as a % of construction cost, increase Change orders, as a % of construction cost, increase for modernization projects as compared to new for modernization projects as compared to new constructionconstruction

• The majority of change orders, as a % of construction The majority of change orders, as a % of construction cost, occur in site construction, rather than building cost, occur in site construction, rather than building constructionconstruction

GeneralizationsGeneralizations

• Discovery of unforeseen physical site or Discovery of unforeseen physical site or building conditionsbuilding conditions

• Designer mistake (error, omission, lack of Designer mistake (error, omission, lack of coordination of documents)coordination of documents)

• Owner-requested changes in the projectOwner-requested changes in the project

• Regulatory agency requirementsRegulatory agency requirements

Common Sources of Change OrdersCommon Sources of Change Orders

• Examples:Examples:o Septic tankSeptic tank

o Unsuitable soilsUnsuitable soils

o Buried debrisBuried debris

Discovery of Unforeseen ConditionsDiscovery of Unforeseen Conditions

• Designers not perfectDesigners not perfect

• ““Error or omission” versus “negligence”Error or omission” versus “negligence”o Legal precedentLegal precedent

o Designer insuranceDesigner insurance

• ““Value Added” conceptValue Added” concepto Net cost to OwnerNet cost to Owner

o Change order premiumChange order premium

Designer-Caused Change OrdersDesigner-Caused Change Orders

• Intentional change in contract amount or Intentional change in contract amount or scheduleschedule

• Usually educational program relatedUsually educational program related

• Responsive to bids and available fundsResponsive to bids and available funds

Owner-Requested Change in ScopeOwner-Requested Change in Scope

• Change in regulationsChange in regulations

• Change in interpretation of regulationsChange in interpretation of regulations

• New regulationsNew regulations

• Change is staffChange is staff

Regulatory Agency RequirementsRegulatory Agency Requirements

• Normal K-12 new construction projects change Normal K-12 new construction projects change order % = 2%-3% of construction costorder % = 2%-3% of construction cost

• WHS budget for construction change orders = WHS budget for construction change orders = 5% of construction cost5% of construction cost

• Expect a change order to come before the Expect a change order to come before the Board about once a monthBoard about once a month

o Made up of multiple “Construction Change Made up of multiple “Construction Change Directives” Directives”

Woodland High School SpecificsWoodland High School Specifics