ConstructionAdvisorToday

Change Order Limitations Can Lead to Mischief

Bruce Jervis, Editor
Construction Claims Advisor

Change order limitations are sometimes imposed on public works contracts by statute, regulation or the contract itself. The underlying policy is to protect the project budget and the integrity of the public procurement process by limiting the expansion of the contractual scope of work. A limitation typically states that if the estimated cost of a change order exceeds a certain percentage of the original contract price, the additional work must be put out to bid.

Change order limitations can lead to devious tactics, however. In a recent California case a public project owner and its construction manager tried to circumvent a ten percent limit in a site work contract in order to avoid the delay of competitive bidding. New grading work was to be added to the general building contract and the building contractor would sub the work to the site contractor.
   
The project owner never amended the building contract and the building contractor wouldn’t pay the site contractor for the “subcontracted” work. The owner and CM settled with the site contractor. But when the site contractor sued the building contractor, the purported subcontract was ruled an unenforceable sham.

I am interested in your experiences with change order limitations. Are the justified and are they effective? Or are they simply an invitation for mischief?

Featured in Next Week's Construction Claims Advisor:

• California Supreme Court Rules on Public Project Owner’s Undisclosed Information
• “Standstill” Provision Amounted to Unenforceable Lien Waiver
• Proposal Downgraded Due to Scheduled Early Completion

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Formal Launch of France GBC Progresses

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Among the organizations putting the France GBC together are Effinergie Association, HQE Association, Qualitel Association, Resobat Association, CSTB, Afnor Group, and the French Insitute for Energy Performance in Buildings. France Green Building Council is also supported by "Plan Batîment Grenelle," the national French state task force for greening the building industry.

Mitigate Risks of Building Green with Properly Executed Construction Contracts

WPL Publishing to Host Webinar:
Green Construction Contracts

90-minute webinar suited for architects, engineers, public and private owners, design professionals, contractors, subcontractors, manufacturers, suppliers, and attorneys.

Green building is becoming the standard for the building environment. Studies predict a 900 percent worldwide growth in green-certified buildings by 2020. However, along with the many benefits of building green come new challenges and risks. The webinar, which is scheduled for Aug. 11, 2010, at 1:00 (EDT), will provide a clear picture of the new risks that green building brings and how they can be circumvented or shared among stakeholders. To register for “Green Construction Contracts,” visit http://tinyurl.com/36aonlr.

During the webinar, Bryan Jackson, a green and sustainable construction partner at Allen Matkins, will discuss various green risks that need to be properly managed and negotiated in green construction contracts. Among the other topics he will address are the following:

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Baltimore-based Avatech Solutions Inc.'s professional services group is working with the Building Technologies Division of Siemens Industry Inc. in designing building information modeling content and developing a building product model publishing strategy.

Hara To Manage, Optimize Effectiveness of Sustainability, Energy Initiatives for Las Vegas Green

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Subcontractor "Pass-Through" Claims Still a Matter of Controversy

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Construction Expert Offers Advice on Change-Management Issues Involving Construction Projects

Before developing a strategy for managing change in construction projects, it is imperative to understand why change occurs, Bruce Hallock, vice president of Marsh Risk Consulting, told attendees of a webinar that CPC/BIM sponsored June 22.

There are six primary causes of change in construction, Hallock said during the webinar, entitled "Change Management: Managing Change vs. Administering the Change Order Process." Such causes include the following: differing site conditions; design revisions; errors and omissions; performance errors; market conditions; and conscious decisions.

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Several entities recently announced developments involving green building programs and building information modeling (BIM) technology. Such entities include Integrated Environmental Solutions Ltd. (IES), GreenWizard Inc., InPro Corp., and the Design-Build Institute of America (DBIA).

IES, a provider of integrated performance analysis software and consulting services for sustainable building design, June 22 released version 6.1 of its software suite, called "V6.1 of the IES Virtual Environment (VE) suite."