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.
Connecticut Compensation for Change Orders and Builder Allowance Overages can be an important aspect of construction projects in the state. Change orders and builder allowance overages may occur due to unforeseen circumstances or the need for modifications and additional work during the construction process. Change orders generally refer to any modifications or alterations to a construction project's plans, scope, or specifications, which result in adjustments to the initial contract and an increase or decrease in project costs. In Connecticut, compensation for change orders is typically determined through negotiations between the project owner and the contractor, adhering to the terms and conditions set forth in the construction contract. Both parties need to agree on the extent of the change, the cost implications, and any associated time extensions. Builder allowance overages, on the other hand, involve exceeding the allocated budget for specific items or allowances agreed upon in the contract. These allowances are commonly included to provide flexibility in selecting materials, fixtures, or finishes during the construction process, giving the project owner various options within a specified cost limit. If the chosen items or materials exceed the allowance, the overage may need to be compensated for by the owner. In Connecticut, there are several types of compensation for change orders and builder allowance overages, including: 1. Lump-Sum Agreement: This type of compensation involves a fixed amount agreed upon by both the project owner and the contractor to cover the change or overage. 2. Time and Material (T&M): Compensation based on the actual hours worked and materials used to complete the change order or builder allowance overage. This method involves hourly rates, material costs, and any associated markup. 3. Cost-Plus-Fee Agreement: In this type of compensation, the owner pays for the actual costs incurred by the contractor, including labor, materials, and overhead, plus a predetermined fee or percentage of the total cost. 4. Unit Pricing: This method involves compensation based on predefined rates for specific units or quantities of work performed in the change order or allowance overage. It is essential for both project owners and contractors in Connecticut to have thorough documentation and detailed contracts outlining the compensation process for change orders and builder allowance overages. This ensures transparency, avoids conflicts, and helps manage project costs effectively. In conclusion, Connecticut Compensation for Change Orders and Builder Allowance Overages play a crucial role in construction projects. The various compensation methods available, such as lump-sum agreements, time and material, cost-plus-fee agreements, and unit pricing, help ensure fair and appropriate compensation for modifications and exceeding builder allowances. Clear communication, documentation, and mutual agreement between the project owner and contractor are vital to successfully manage these compensation issues and maintain a positive construction experience.
