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.
Massachusetts Compensation for Change Orders and Builder Allowance Underage: In Massachusetts, compensation for change orders and builder allowance underage refers to the financial adjustments made in construction projects when changes or modifications are requested by the client or property owner. These changes may include alterations to the original plans, materials, or scope of work. Change orders typically occur when the client wants to add, remove, or modify certain aspects of the project, leading to additional costs or a change in the agreed-upon construction schedule. The Massachusetts compensation for change orders ensures that the builder or contractor is fairly compensated for the extra work and expenses incurred due to these changes. There are several types of Massachusetts compensation for change orders, including: 1. Time and Material Change Orders: This type of change order compensates the builder for additional labor and materials required to complete the modified aspects of the project. It typically involves tracking and recording all additional costs such as extra hours worked and materials purchased. 2. Fixed Fee Change Orders: Fixed fee change orders involve pre-negotiated costs for specific modifications, ensuring that both parties are aware of the financial implications beforehand. This approach provides transparency and avoids potential disputes or disagreements over compensation. 3. Percentage Change Orders: In some cases, compensation is based on a predetermined percentage of the project's original contract price. This method allows for flexibility when calculating the compensation, especially when the extent of the changes is not yet clearly defined. Builder allowance underage pertains to situations where the builder or contractor incurs additional costs due to factors beyond their control, such as unforeseen site conditions or changes in building regulations. This type of compensation aims to cover the builder's legitimate expenses incurred during the construction process. It is essential for both the builder and the client to have a clear understanding of the compensation process and the terms outlined in the contract. Proper documentation, including written change orders and detailed records of expenses, is crucial to ensure fair compensation. By implementing these compensation mechanisms, Massachusetts protects the rights and interests of both the construction professionals and the property owners, facilitating a smooth and fair construction process.
