A change order is work that is added or removed from the original scope of work in a contract, but may or may not change the original contract amount and/or completion date, depending on the scope of the change. A change order can force a new project to process important changes to the current project. [2] In the overall conclusion of the studies on the effects of the sequence of change, it was found that the most common effect of change orders is cost overruns followed by waiting time: in the construction sector; A change in scope is a common phenomenon called variational order (VO). It is a written agreement between the contracting parties that includes and reflects changes in the agreed contractual scope of the work. However, it sometimes becomes more difficult when it comes to this; whether changes in the scope of work may constitute a change. Therefore, this article deals with what a variation is, the reasons and types of variations and their consequences thereafter. – Contract price increase: The increase in project cost is the joint effect to which the contract is exposed due to an additional change. The possible causes of orders of variation and the agents that cause these orders are studied by many researchers. At the conclusion of the research, four main agents for orders of variation were proposed.
These include clients, consultants, contractors and certain external agents. [3] For these agents, it should be noted that clients and consultants are the main drivers of change orders. In addition, under the pretext of modification, the contract administrator cannot change the nature of the work. If, for example, the contract provides for the construction of secant piles, they cannot require the construction of diaphragm walls, as this would completely change the nature of the work. Determining the time required is another common problem that arises when negotiating. There may be disagreements between the parties about the duration of the work indicated in the order of changes and its impact on the overall project schedule. From a legal point of view, an amendment is an agreement supported by the consideration of modifying certain conditions of the contract. No power to order amendments is implied and, therefore, there must be explicit conditions in contracts giving the power to order amendments. In the absence of such express conditions, the Contractor may refuse amendment instructions without legal consequences. – Loss of productivity (disruption): Loss of productivity may occur during the implementation of the change, exposing the employer to a claim for disruption.
According to FIDIC`s Red Book, an amendment means „any modification of the works that is ordered or approved as a modification in accordance with clause 13“. It is clear from this paragraph that any instruction for additional work not given or authorized in accordance with Article 13 does not constitute a change. To some extent, this definition is not complete. The nature of the definition would affect the engineer`s direction in section 3.3. However, clause 3.3 attempts to address this issue by „if a direction constitutes a change, section 13 [amendments and adjustments] applies“, so that a change can be ordered in accordance with section 3.3 and not just section 13. When preparing change orders, the modified work should be examined in detail. According to Levy [11], change orders must be complete in all respects before they are submitted. No further explanation should be required and the order of change should not raise question marks as to scope, cost or schedule. The following elements must be considered for a detailed and complete modification order [12]: If a work in the work modification order corresponds to an element description in the BoQ, the rate in the BoQ is used to calculate the value of the modification. Harmful variations are the type of variations that reduce the value of the owner and have a negative impact on a project. They should be minimized as much as possible to avoid problems.
It should also be noted that adverse variations do not appear disadvantageous from the outset, but may be considered disadvantageous due to their timing. They may need to be applied because no other solution is available at the time of the project. [14] The possible effects of adverse deviations may be: Conflicts may also arise if, for example, a subcontractor qualifies „supply and repair of doors included“ but „supply and repair of hardware is excluded“. A reasonable subcontractor should provide that a door cannot be fixed without hinges – which is part of hardware. Thus, even if the processing of the material is excluded, the subcontractor cannot expect any deviation for any of the elements necessary for the repair of the doors. During the performance of the work, subsection 13.2 must allow the contractor to submit an application for a change. This proposal, in the opinion of the contractor, may include one of the following: Since change orders are often the reason for a conflict between the agreed parties, a change order must be clear, it must not contain discrepancies. It should include the work to be done, where and when the work will be done, the method and timing of payment, changes in duration, etc. Therefore, the preparatory phase of the order of changes must be treated with great care. In particular, change orders must contain the information mentioned below so as not to be the source of conflicts/disputes between the parties agreed later [1]: Change orders can be used as powerful tools to modify the project according to the client`s needs and maximize the efficiency of the project. However, if change orders are not prepared carefully and in detail, they can cause many problems between the parties involved and end up leading to increased project costs and delays in the project completion time. An engineer`s instruction may also be initiated for negative changes affecting omissions in the work when parts of the contract work are removed or cancelled.
These instructions for negative deviations also reduce the value of the order. However, the terms of FIDIC Red Book 99 do not limit the scope or value of the omission, which may cause litigation if the value of the omitted works is found to be significant. In such a case, the entrepreneur can claim both damages and lost profits. When drafting this particular condition, it is advisable to clearly define the permissible percentage of omission. According to the FIDIC Red Book, any changes [2] may include: However, the employer is not obliged to accept the contractor`s proposals. The engineer determines the contractor`s proposal and, after evaluation, if an agreement is reached between the parties, this work may be issued in the form of an amendment order. The contractor`s rates are not made reasonable or unreasonable by the implementation of amendments, as set out in Henry Boot Construction Ltd v. Alstom, 1999.
Any deviation from the contractually agreed scope of services is considered a modification of a project. Advantageous variations are the type of variations that are good for the project. They have a positive effect on the project; Therefore, they are well received by the project management. [14] These effects can be: The length of the approval process can be one of the problems in the negotiation process. Change orders are reviewed and discussed in detail. It may take some time to reach an agreement between the two parties, and even after the agreement, it may take some time before the order of the changes is approved. This causes problems for contractors and can delay work. It should be noted that changes can be initiated at any time prior to the issuance of the certificate of acceptance of the work and change orders are formed either at the request of the client/owner or with the recommendation of the contractor for a change. It may be agreed that a change in scope or changes (as they are also called) are a change in the information existing at the time of conclusion of the contract, whether at the beginning or later. This definition undeniably raises the question; Who is responsible for the change or, in other words, what is the responsibility of the parties for the change. Until this is established, you can determine whether or not the amendment is eligible for the additional cost.
It can therefore be noted that not all changes would necessarily represent additional costs or an extension of time, i.e. if the changes are due to omissions by the contractor. An amending clause allows the employer to unilaterally change the terms of the contract or the scope of work. It also confirms the ability of the agreement and the parties to reflect achievable project requirements, if required. Paragraph 13.1 of the FIDIC Conditions gives the engineer the right to make an amendment, either by instruction or by asking the contractor to submit a proposal. In addition, articles 886 and 887 of the Code of Criminal Procedure allow the amendment of the contract after the agreement of the employer. In project management, change orders are also called change orders or change orders. Any modification or modification of the works agreed in the contract will be treated as a modification.