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.
Alaska Compensation for Change Orders: In the construction industry, change orders refer to modifications or alterations made to the original scope of work agreed upon in a construction contract. These changes may be requested by either the owner or the contractor. Alaska Compensation for Change Orders outlines the guidelines for how these changes are to be addressed, both in terms of cost and time implications. When a change order is implemented, it is important to consider the impact it will have on the project's budget and schedule. The compensation for change orders in Alaska varies depending on the type of change and the specific contractual arrangements. Some key types of Alaska Compensation for Change Orders include: 1. Fixed Price Change Orders: These change orders involve a direct agreement on a fixed amount of compensation for the proposed modification. The change order will clearly state the additional costs that will be incurred due to the change, and the compensation will be based on these costs. 2. Time and Material Change Orders: In certain cases, it may be difficult to determine the overall cost of a change order upfront. In such instances, time and material change orders are used. This means that the contractor is compensated based on the actual time spent and the materials used to complete the change order. 3. Percentage of Construction Cost Change Orders: Another way of determining compensation for change orders in Alaska is to base it on a percentage of the project's overall construction cost. This approach is often used when the full financial impact of the change order is not readily determinable. It is crucial for all parties involved in a construction project to adhere to the terms and procedures outlined in the contract in regard to change orders. Failure to follow the proper processes can lead to disputes and potential financial losses for both the owner and the contractor. Builder Allowance Underage in Alaska: In the realm of construction, builder allowances refer to specific monetary allowances provided to the owner by the contractor to facilitate certain selections or choices within the project. These allowances are typically included in the initial contract as a means of incorporating flexibility into the project specifications. However, when it comes to underage builder allowances, specific precautions and regulations come into play to protect the interests of all parties involved. In Alaska, underage builder allowances pertain to situations where the monetary allowance provided by the contractor turns out to be insufficient to cover the required selections made by the owner. To address this issue, certain steps and policies have been established to ensure fair compensation and resolve any related disputes. The process generally involves the following: 1. Detailed Documentation: Both the owner and the contractor must maintain thorough records of the selections made and their related costs. This documentation is critical for resolving any potential disputes regarding underage allowances. 2. Change Order Requests: If the allowance provided proves inadequate, the owner may submit a change order request to address the shortfall. The change order will outline the additional costs incurred due to the selections exceeding the original allowance. 3. Negotiation and Resolution: Once the change order is submitted, negotiations between the owner and the contractor will take place to determine how the additional costs should be allocated. The resolution will depend on factors such as the cause of the underage allowance, contractual agreements, and considerations of fairness. Adhering to the guidelines and procedures outlined in the contract is crucial to ensure that underage builder allowances are addressed adequately. Effective communication and documentation between all parties involved will contribute to a smoother resolution process, minimizing potential disputes.
