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.
Missouri Compensation for Change Orders and Builder Allowance Underage: A Detailed Description In Missouri, compensation for change orders and builder allowance underage are crucial aspects of construction contracts and agreements. These terms cater to unexpected modifications, deviations, or upgrades requested by the property owner during the construction process. Here, we delve into the specific types of compensation, understanding their significance, and how they shape the construction industry in Missouri. Change Orders: Change orders refer to modifications made to the original construction plans or specifications agreed upon by both the property owner and the builder. These changes might arise due to various reasons such as design alterations, material substitutions, or unforeseen circumstances encountered during the construction process. Missouri recognizes several types of change orders: 1. Scope Changes: These occur when the property owner requests alterations to the project's scope, which may include adding extra features, expanding or reducing certain areas, or changing design elements. 2. Material Changes: Material change orders pertain to modifications in the construction material specified in the initial plans. This can involve substituting one material for another due to availability, cost, or performance-related factors. 3. Design Changes: Design change orders involve adjustments to the original architectural or engineering plans. These changes may result from the property owner's preferences or due to unforeseen site conditions that require design modifications. Builder Allowance Underage: Builder allowance underage is another compensation term that outlines how deviations from the original plans are handled. This refers to instances where the actual cost of construction exceeds the agreed-upon allowance or budget allocated for certain items or features. Missouri recognizes two main types of builder allowance underage: 1. Owner Initiated: This type of builder allowance underage occurs when the property owner decides to upgrade specific materials, finishes, or fixtures beyond what was initially specified. If the chosen upgrades exceed the allocated budget, the property owner is responsible for covering the additional costs. 2. Builder Initiated: In some cases, the builder may suggest replacing or upgrading certain items due to unforeseen circumstances or superior alternatives becoming available during the construction process. Here, the added cost resulting from the builder's suggestions is borne by the property owner. Both change orders and builder allowance underage impact the construction project's timeline, cost, and overall outcome. They require clear communication, documentation, and agreement between the property owner and the builder to ensure a smooth construction process and prevent disputes. To conclude, Missouri's compensation for change orders and builder allowance underage is an essential part of the construction industry. Change orders allow for flexibility and adaptation during the construction process, ensuring clients' needs are met, while builder allowance underage clarifies responsibility for unforeseen cost overruns. It is crucial for all parties involved to understand the implications and guidelines associated with these compensation terms in Missouri's construction projects.
