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.
Broward County, located in the state of Florida, offers compensation for change orders and builder allowance overages to ensure fair and transparent transactions between builders and homeowners during the construction process. Change orders are adjustments made to the original contract, typically initiated by the homeowner, to modify or add to the original scope of work. On the other hand, builder allowances are predetermined sums of money that builders allocate to specific items or upgrades in the construction budget. Broward County recognizes the need for compensation mechanisms to address change orders and builder allowance overages to prevent misunderstandings, disputes, and financial strain on both parties involved in a construction project. These compensation policies promote a smoother construction process while safeguarding the interests of all stakeholders. Under Broward County's compensation policies, there are different types of compensation for change orders and builder allowance overages: 1. Change Order Compensation: — Cost-Plus Change Orders: In this type of compensation, the change order costs are calculated based on the actual expenses incurred by the builder, including direct labor, materials, subcontractor costs, and overhead expenses. Broward County ensures that these costs are reasonable and justified. — Fixed Sum Change Orders: This type of compensation involves a predetermined fixed sum agreed upon by both parties for specific changes or additions to the original contract. The fixed sum may include labor, materials, and additional charges associated with the change. 2. Builder Allowance Overages Compensation: — Lump Sum Allowance Overage: When the costs associated with the selected builder allowances exceed the allocated budget, Broward County compensates the builder based on a predetermined lump sum agreed upon at the beginning of the project. This compensation helps cover the additional expenses incurred during the selection process and materials procurement for these allowances. — Percentage Allowance Overage: In this compensation method, the builder is reimbursed for the overages within a specific percentage limit agreed upon beforehand. Broward County sets a threshold or percentage that if exceeded, triggers compensation for the additional costs incurred. By offering Broward Florida compensation for change orders and builder allowance overages, the county aims to ensure that homeowners and builders enjoy a mutually beneficial and transparent construction process. These compensation policies help protect the financial interests of all parties involved and promote a successful completion of construction projects in Broward County.
