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.
Michigan Compensation for Change Orders refers to the legal provisions that govern the payment and reimbursement of additional costs incurred due to changes in construction plans or specifications during a building project in the state of Michigan. This compensation aims to properly compensate contractors, subcontractors, suppliers, and other stakeholders for their time, effort, and resources involved in implementing changes or modifications. Under Michigan law, compensation for change orders is typically outlined in construction contracts and can be categorized into different types, including: 1. Non-Construction Labor Changes: This refers to changes in labor requirements that do not directly impact the construction process but may involve additional costs, such as changes in design, materials, or techniques, resulting in increased labor hours. 2. Variations in Quantity: Compensation for changes in quantity occurs when there is a variance in the amount of materials or scope of work originally specified. If the original contract specifies a certain quantity and the project requires additional or reduced quantities, compensation is made to cover the associated costs. 3. Design Changes: Design changes often occur during construction projects due to various reasons, including client preferences or site constraints. Compensation for design changes accounts for additional planning and revisions required by architects, engineers, or designers to accommodate the modifications. 4. Suspension/Interruption: Compensation for suspension or interruption refers to situations where the work is halted or delayed due to circumstances beyond the contractor's control. These circumstances can include weather events, owner-requested pauses, or unforeseen issues arising during construction. Contractors are entitled to compensation for any loss of productivity, increased expenses, or extended project duration as a result of such suspensions or interruptions. Builder Allowance Underage, on the other hand, is a term often associated with contracts in the construction industry, but not specifically related to compensation for change orders. Builder allowances are funds allocated by the owner or developer of a project to the contractor to cover specific items or aspects within the construction process. They are typically established during the contract negotiation phase and are intended to provide flexibility to meet certain design, material, or equipment choices. While there may not be a direct correlation between Michigan Compensation for Change Orders and Builder Allowance Underage, both terms are relevant in the context of construction projects. Michigan Compensation for Change Orders addresses the remedies and entitlements for additional costs resulting from changes, while Builder Allowance Underage pertains to the financial allocation for specific items or aspects within the construction contract.
