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.
Contra Costa California Compensation for Change Orders and Builder Allowance Overages refers to the financial agreements and provisions set in place to address changes and overages that occur during construction projects in the Contra Costa County of California. These compensation terms are implemented to ensure fair and adequate remuneration for additional work and expenses incurred due to modifications, upgrades, and unforeseen circumstances in construction projects. 1. Change Orders: Change orders are modifications or variations made to the original construction plans, specifications, or scope of work during the project's progress. They can occur due to design alterations, client requests, unforeseen site conditions, or regulatory changes. Contra Costa California Compensation for Change Orders involves fair compensation calculations for additional materials, labor, equipment, and other costs directly resulting from change orders. 2. Builder Allowance Overages: Builder allowances refer to a provision in construction contracts that allows clients to select specific items or finishes within a pre-determined budget. However, in certain cases, clients may choose options exceeding the original allowance amount, resulting in builder allowance overages. Contra Costa California Compensation for Builder Allowance Overages aims to address these additional expenses and establish a fair financial resolution between the client and the builder. Different Types of Contra Costa California Compensation for Change Orders and Builder Allowance Overages: 1. Cost-Plus Compensation: One type of compensation method is the cost-plus approach, where the builder is reimbursed for the actual costs incurred, including labor, materials, and overhead, plus an agreed-upon percentage for profit. In this case, change orders and builder allowance overages are calculated based on the actual costs of the additional work. 2. Lump Sum Compensation: Some construction contracts employ the lump sum compensation method, where the builder agrees to complete the project for a fixed sum. In this case, change orders and builder allowance overages are negotiated separately and added to the original contract amount. 3. Unit Price Compensation: In certain scenarios, construction projects utilize unit prices for specific tasks or materials. Compensation for change orders and builder allowance overages in this case is calculated based on these predetermined unit prices, establishing a transparent and consistent approach to additional costs. 4. Negotiated Compensation: In more complex projects, compensation for change orders and builder allowance overages might involve negotiations between the client, builder, and potentially, third-party consultants or experts to determine a fair and mutually agreeable resolution. Contra Costa California Compensation for Change Orders and Builder Allowance Overages ensures that projects can adapt to evolving needs and circumstances while providing a mechanism for managing and compensating for additional costs. These compensation provisions ultimately foster transparency, fairness, and successful completion of construction ventures within the county of Contra Costa, California.
