Change Orders are instructions to revise construction plans after they have been completed. Change orders are common to most projects, and very common with large projects. After the original scope (or contract) is formed, complete with the total price to be paid and the specific work to be completed, a client may decide that the original plans do not best represent his definition for the finished project. Accordingly, the client will suggest an alternate approach.
Common causes for change orders to be created are:
" The project's work was incorrectly estimated;
" The customer or project team discovers obstacles or possible efficiencies that require them to deviate from the original plan;
" The customer or project team are inefficient or incapable of completing their required deliverables within budget, and additional money, time, or resources must be added to the project; and
" During the course of the project, additional features or options are perceived and requested.
Philadelphia, Pennsylvania Compensation for Change Orders and Builder Allowance Overages In Philadelphia, Pennsylvania, compensation for change orders and builder allowance overages plays a significant role in construction projects. Change orders and builder allowance overages occur when there are modifications or additional work requested by the client that weren't initially included in the project scope or budget. These changes may result from design alterations, unforeseen site conditions, or other factors that impact the construction process. Change orders refer to any modifications or additions made to the original construction plans or contract. When a change order is requested, it is essential to assess its impact on the project's timeline, budget, and other related aspects. Compensation for change orders in Philadelphia often involves adjusting the contract price, scope of work, or both. It is crucial for both parties, the client and the builder, to have clear communication and documentation throughout the change order process. This ensures that there is a fair and reasonable resolution regarding the compensation. Builder allowance overages, on the other hand, refer to situations when the cost of materials, fixtures, or finishes selected by the client exceeds the predetermined allowances specified in the initial contract. These allowances are typically pre-determined amounts allocated for specific items, such as flooring, cabinetry, or lighting fixtures. When a client surpasses these allowances, additional compensation may be necessary to cover the excess costs. It is crucial for builders to provide accurate estimates and communicate clearly with clients to mitigate the chances of builder allowance overages. In Philadelphia, there are different types of compensation methods for change orders and builder allowance overages. These include: 1. Unit Price Compensation: This method involves establishing specific unit costs for various construction elements. When a change order or builder allowance overage occurs, the unit price is multiplied by the quantity of additional work or the excess amount to determine the compensation. 2. Lump Sum Compensation: In this approach, a fixed amount is agreed upon between the client and the builder to cover all change orders or builder allowance overages. This method offers simplicity and avoids frequent negotiations for each alteration, but it requires accurate estimation of potential changes beforehand. 3. Time and Material Compensation: With this method, compensation is based on the actual time spent and materials used for the additional work or excess allowance. The client pays for the builder's time at an agreed hourly rate and reimburses the costs of materials used. Regardless of the compensation method used, it is crucial to have proper documentation, such as change order forms, signed agreements, and accurate record-keeping of project revisions. Adequate communication and transparency between the client and builder are essential to ensure a fair and satisfactory resolution regarding compensation for change orders and builder allowance overages in Philadelphia, Pennsylvania.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
