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.
Bexar Texas Compensation for Change Orders and Builder Allowance Overages In Bexar County, Texas, compensation for change orders and builder allowance overages plays a significant role in construction projects. Change orders refer to modifications or alterations made to the original construction plans and specifications, while builder allowance overages refer to costs exceeding the allocated budget for specific items or services. 1. Bexar Texas Compensation for Change Orders: Change orders are common in construction projects, and Bexar County has established specific guidelines to ensure fair compensation. There are various types of compensation for change orders: a) Lump Sum Compensation: Under this type of compensation, the client and builder agree on a fixed price for the change order. The client pays a predetermined amount to cover the additional work or materials required. b) Time and Material Compensation: In this approach, the client compensates the builder based on the time spent and the cost of materials required for the change order. The builder provides detailed documentation of hours worked, rates, and material costs. c) Unit/Percentage Compensation: Sometimes, compensation for change orders is calculated based on a predetermined percentage of the total project cost. Alternatively, a unit price can be assigned to specific change order items, and the compensation is determined by multiplying the unit price by the quantity required. 2. Bexar Texas Compensation for Builder Allowance Overages: Builder allowances are predetermined amounts allocated to specific items or services within a construction project. If these allowances are exceeded, Bexar County offers different compensation options: a) Client Pays the Difference: In this scenario, if the actual cost exceeds the allocated allowance, the client agrees to cover the excess amount. The builder provides full transparency by presenting the actual cost and justifies the need for additional funds. b) Negotiated Settlement: Sometimes, the builder and client negotiate a fair settlement for any allowance overages. This could involve compromising on other aspects of the project or reallocating funds from different allowances. c) Adjustment to Final Payment: If allowance overages remain unresolved at project completion, the agreed-upon compensation can be deducted from the final payment. This ensures that the builder is reimbursed for legitimate expenses while holding them accountable for cost management. In conclusion, Bexar Texas has well-defined compensation methods for change orders and builder allowance overages. These compensation options include lump sum, time and material, unit/percentage compensation for change orders, and client payment, negotiated settlement, or adjustment to final payment for allowance overages. Adhering to these guidelines ensures transparency, fairness, and appropriate cost management in construction projects throughout Bexar County, Texas.
