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.
Nebraska Compensation for Change Orders: In Nebraska, compensation for change orders refers to the additional costs incurred due to alterations or revisions made to the original construction plans or contract. These changes may include modifications to the design, materials, scope of work, or other aspects of a construction project. Builders and contractors in Nebraska are entitled to receive additional compensation for change orders when they encounter unexpected circumstances, challenges, or if the client requests modifications during the construction process. Nebraska's law recognizes the need for fair compensation for these changes, aiming to ensure that both parties are adequately compensated for any adjustments made to the original plan. There are different types of compensation for change orders in Nebraska, including: 1. Unit Price Change Orders: In certain cases, the compensation for change orders may be determined based on a predefined unit price. This approach allows for more accurate cost estimation when dealing with changes that involve a specific unit of measurement, such as area, length, or volume. 2. Time and Material Change Orders: This method of compensation involves billing the client for the actual time spent and materials used to implement the change order. Detailed records are typically maintained to support the calculation of labor hours, equipment usage, and material costs. 3. Lump Sum Change Orders: In some cases, compensation for change orders may be negotiated and agreed upon as a lump sum amount. This approach simplifies the accounting and billing process, providing a fixed price for the requested changes. Builder Allowance Underage: Builder allowances refer to the budgetary provisions included in a construction contract to account for potential variations in materials, finishes, fixtures, or other construction related items. These allowances are set by the builder or contractor to allow the client to select specific items within a predetermined budget. Underage in builder allowances refers to the situation where the client exceeds the budget allotted for a particular allowance item. This may happen when the client chooses higher-priced options or premium upgrades, resulting in an excess cost beyond the initial allowance. While Nebraska law does not specifically address underage in builder allowances, dealing with such situations typically involves negotiations and discussions between the builder and the client. Possible solutions may include revising the construction contract to reflect the additional costs, seeking alternative materials or finishes within the original budget, or exploring financing options to cover the excess expenses. It is important for both builders and clients in Nebraska to clearly understand the allowances provided in the contract and to communicate effectively throughout the construction process to avoid any potential issues related to underage in builder allowances. Open and transparent communication can help resolve any discrepancies or disputes that may arise during the project.
