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.
Chicago, Illinois Compensation for Change Orders and Builder Allowance Underage: Change orders are a common occurrence in the construction industry and often necessitate compensation for the additional work or modifications involved. In the bustling city of Chicago, Illinois, compensation for change orders and the provision of builder allowances are vital factors in construction projects. When it comes to compensation for change orders in Chicago, there are various types that builders and contractors need to be aware of. These include: 1. Fixed Price Change Orders: In this type of compensation, the contractor and client agree upon a predetermined amount that should cover any potential change order costs. This fixed price is established upfront; however, it is important for both parties to clearly outline the scope and limits of this provision. 2. Time and Material Change Orders: With this compensation model, the contractor is paid for labor and materials used in executing the change order. Chicago's builders must keep detailed records of the additional hours worked, materials purchased, and associated costs to receive proper reimbursement. 3. Percentage Change Orders: Under this compensation structure, the change order cost is determined by calculating a percentage of the original contract value. The agreed-upon percentage can vary depending on the complexity and scope of the changes required. Aside from change order compensation, Chicago also emphasizes builder allowances to accommodate unforeseen expenses or adjustments. Builder allowances can cater to various aspects of the project, including materials, finishes, upgrades, or changes requested by the client. Common types of builder allowances in Chicago include: 1. Material Allowances: Builder allowances for materials provide flexibility to clients for selecting preferred materials within a specified price range. This allows homeowners to customize their spaces while still adhering to the project's budgetary constraints. 2. Upgrades Allowances: Builder allowances for upgrades allow clients to enhance certain aspects of the construction process. These upgrades can range from selecting higher-end appliances, fixtures, or finishes that go beyond the standard options provided in the construction plans. 3. Change Allowances: In situations where clients have not made specific choices within a given category, such as flooring or cabinetry, change allowances provide the opportunity to decide at a later stage. This allows homeowners to make decisions closer to the completion of the project, ensuring a more informed choice. It is important to note that compensation for change orders and builder allowances in Chicago, Illinois, must comply with local building codes, zoning regulations, and contractual agreements between the parties involved. Construction professionals should always consult with legal experts and follow industry best practices ensuring fair compensation and adherence to project budgets.
