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.
Title: Understanding Utah Compensation for Change Orders and Builder Allowance Underage: A Comprehensive Guide Introduction: Utah compensation for change orders and builder allowance underage is a crucial aspect of construction projects in the state. This detailed description aims to provide an in-depth understanding of these concepts, including their definitions, types, and legal implications. By shedding light on relevant keywords, this guide will help contractors, builders, and homeowners navigate these compensation provisions effectively. 1. Utah Compensation for Change Orders: Change orders refer to modifications or alterations made to original construction plans, contract specifications, or drawings during a construction project. In Utah, compensation for change orders is governed by specific regulations to ensure fairness and transparency. Below are a few types of change orders compensation: a) Time and Material Change Orders: Under this compensation method, contractors are paid based on the actual time spent on a change order, including any material costs incurred. Compensation rates are often predefined in the construction contract or negotiated on a case-by-case basis. b) Fixed Price Change Orders: Fixed price change orders establish a predetermined compensation amount for specific changes requested during the construction process. Contractors receive a fixed sum for executing the change, regardless of the time or materials involved. c) Percentage of Original Contract Sum: Here, compensation for change orders is determined as a percentage of the original contract sum. This method considers the scale of the change and its impact on the overall project cost. 2. Builder Allowance Underage in Utah: Builder allowance underage refers to instances where the actual cost of the work performed is lower than the allocated budget. This often occurs when a contractor completes the assigned task without utilizing the full budgeted amount. It is crucial to understand the following types of builder allowance underage: a) Fixed Allowances: Fixed allowances are predetermined amounts set aside for specific aspects of the construction project, such as fixtures, finishes, or equipment. If the actual costs for these items are lower than the budgeted allowance, the builder retains the surplus amount. b) Contingency Allowances: Contingency allowances are generally included in a project's budget to accommodate unforeseen expenses or changes. If these allowances are not utilized due to favorable project conditions, the leftover funds become part of the builder allowance underage. c) Time and Material Savings: Contractors may complete the construction work in less time than originally estimated, resulting in labor and material cost savings. Such savings contribute to the builder allowance underage, provided they do not compromise the quality or integrity of the project. Conclusion: Utah compensation for change orders and builder allowance underage are essential elements in construction projects. They aim to ensure fair compensation for changes requested during the construction process and allocate any surplus funds saved from the initial budget. Understanding the different types of compensation methods and allowance underage helps both contractors and homeowners effectively manage construction costs while maintaining project quality and adherence to legal regulations.
