Construction 101: Change Orders

[wyodan]

At the risk of looking stupid, I am asking for some guidance here.

Currently undergoing a major renovation.

GC presented a quote/contract. We signed.

Now we are in the midst of the job, and little things keep coming up. Oh this is an inch off from what the design firm drew up, so now we need more material. That will be a change order for $400.

We ran into a second slab/footer during demo that was not expected to be there, that took us an extra day. Change order.

We can't do one step as shown in the drawings, we have to do 2 because of code. Now that is more concrete and forming boards and labor. Change order for $1,500.

etc.

In my mind a change order should be when WE go to the GC and ask for a wall to be somewhere other than where it was in the drawing, or ask for a window to be put somewhere where there wasn't one. Some change of scope that we create by our desires to make a change to the previous plan.

What I am getting now is a weekly "Oh, hey, can we talk about this detail/problem we ran into?" Which leads to another few hundred dollars here or there.....none of it is stuff we came to him with. I like my GC and generally think he is a good guy, but am starting to feel nickeled and dimed, possibly taken advantage of. My view is he should bid jobs with a healthy margin for little stuff he wasn't planning on. That's the whole reason we wanted a bid and not "cost plus".

(We did not include finishes in the scope, so if we feel at the end of this main stage that he has screwed us, we will not have him do any of the finishes. That's really the only possible leverage we might have at this point.)

I'd like some guidance or advice from the slide from folks who know more about this than me on if this is just how it goes, or if it sounds like my GC smells an inexperienced (true) client.

My opinion based off of your post. This will all depend on the wording in your contract.

An inch off for more material, no CO. Contracts I deal with usually have a clause for cutting and fitting. I feel this would fall there.

The 2nd slab/footer, this is a warranted change order if this was not known prior to their work.

The 2 steps because of code, this one should fall on the architect for a design omission. It's their job to make sure the drawings are to code, and you should not be liable. That's why you hire these folks, for their expertise. They will probably push back, and again it would be what's in this contract.

Change orders can generally be initiated by either party. It is important to see if it is still within the scope of the project.

There may be several things missing here without being able to read your contract.

 

[longspeak74]

Did you and the GC do a pre-construction walkthough with the plans in hand? Did you initial or sign the plans before work started?
A CO for an unexpected footing/slab discovery is typical but a CO for something code related should be on him.

 

[cnelk]

Architects have Errors & Omissions Insurance (I also have it in my insurance)

You should get a meeting with the architect/GC/yourself and discuss the issue(s).
Many times the CO cost is or can be split among the different parties- if all have a part in it.

 

[def90]

Not sure about residential these days but I work in commercial and in commercial work there is usually a "contingency" portion of the construction budget which is usually a percentage of the total project. Odd ball things like this are covered by the contingency budget. If nothing comes up the money is never used.

Back when I did do resodential, in a remodel it wasn't uncommon for the project to end up 20% or more over the original budget due to this stuff.

Jobs are bid based on the plans, if the plans are messed up it is what it is. That said I've seen messed up plans during the bidding process and was told by the GC to bid based on the plans regardless of the fact. Basically in the end lawsuits are won or lost based on whether the plans were followed.

 

[cnelk]

Not sure about residential these days but I work in commercial and in commercial work there is usually a "contingency" portion of the construction budget which is usually a percentage of the total project. Odd ball things like this are covered by the contingency budget. If nothing comes up the money is never used.

Exactly. Earlier in the thread I mentioned the 3-5% for COs / contingencies.

Back when I was in the commercial construction industry as an Owners Rep/PM for a govt entity, we even put Liquidated Damages of $1000/day if the project didn’t make the Substantial Completion date in the contract.
Some contractors would try for weather delays but keeping good records kept them honest.

 

[KsRancher]

Worked on several commercial job sites where there was a per day $ amount that the GC had to pay the owner if not completed by a certain day. But also like mentioned above. They had a "over bid of 20%" in change orders before having to run it by the owner. So I doing the dirt/rock work, we weren't allowed weather days. Even if it meant a change order since we destroyed the jobs site and messed up all the original rock. Change orders didn't cost the GC, but did the owner. Overrun days due to weather cost the GC. And when your working for the GC, they are the boss

 

[cnelk]

Jobs are bid based on the plans, if the plans are messed up it is what it is. That said I've seen messed up plans during the bidding process and was told by the GC to bid based on the plans regardless of the fact. Basically in the end lawsuits are won or lost based on whether the plans were followed.

Actually, the Project Manual trumps the drawings - if there is one.

 

[GMann]

Does the contractor note their conditions assumptions in their bid?

They should. That's a good point that maybe the OP can check if they have a written contract.

Sent from my moto g power using Tapatalk

 

[def90]

Actually, the Project Manual trumps the drawings - if there is one.

True to a point but the project manual usually just provides specs on the systems, equipment and finishes standards. When it comes to brass tacks at the end It still comes down to the prints. The project manual doesn't make up for the fact that the prints show multiple inward swinging doors when outward swing is required by code in those locations. Keep in mind these prints also went through the permitting process and were approved by the city.

 

[cnelk]

The project manual doesn't make up for the fact that the prints show multiple inward swinging doors when outward swing is required by code in those locations. Keep in mind these prints also went through the permitting process and were approved by the city.

Door swing is dictated by building occupancy and/or fire rating. If the Design Professional doesnt get that right before plan review, better get one that knows.

Our AHJ [Authority Having Jurisdiction] was at the State level. City/County never even got a cursory review, or even an inspection.

 

[def90]

Door swing is dictated by building occupancy and/or fire rating. If the Design Professional doesnt get that right before plan review, better get one that knows.

Our AHJ [Authority Having Jurisdiction] was at the State level. City/County never even got a cursory review, or even an inspection.

Yes, door swing was dependent on occupancy in this case. the architect got it wrong and the permit review board either got it wrong or missed it as well as the plans as drawn up got a stamp from the city. I caught it in the bidding phase though my part didn't really matter either way budget wise as I was providing access control equipment but was told to bid based on plans.

In the end the inspector caught it, builder ended up having to go through a lengthy review process and somehow got a waiver from the city (probably because they F'd up as well) vs replacing 35 steel frame side glass doors.

Either way contingency clauses should handle plan f ups while change orders should handle real changes.

 

[Drenalin]

My view is he should bid jobs with a healthy margin for little stuff he wasn't planning on. That's the whole reason we wanted a bid and not "cost plus".

If he included a healthy margin, or contingency, he probably wouldn’t have been the low bidder. Many GCs will pad their pricing to cover the little unexpected stuff, especially for remodels, but they still come across unexpected/unforeseen conditions. Unless your bid documents or the contract specifically require the GC to carry a contingency allowance for those things, then you should be carrying one on your end.

Good luck recouping costs for inaccurate, inadequate plans through your designer’s errors and omissions insurance. He probably has a note somewhere in those plans to the effect of GC needing to verify all existing conditions prior to beginning work, which is neither reasonable nor realistic. The intent of those types of notes in plans has become for designers to pass the buck to the GC rather than providing the complete services they were hired to provide.

Out of the specific items you listed, the additional footer demo is an unforeseen and a legit change order request. The one inch dimensional difference, if that’s literally the case, is ticky-tac bs that makes me dislike the guy, even without knowing him. The additional step is likely a mistake by the designer, but he’s likely covered himself with a note that puts it back on the GC. If that note exists, you can do the same, but he’s going to get that $1,500 back from you on the next change order.

Some contractors will intentionally lowball a job with the intent to make it up in change orders. He may or may not be that type, but at some point you’re going to have to have a real frank conversation about what’s on him and what’s on you. He already knows, unless he’s completely out of his depth (which is possible, and might be why he’s the low bid).

I’m a commercial GC, not residential, but in my world there are no T&M change orders on lump sum contracts.

FYI, for the next phase of this project, look into a cost-plus contract with a guaranteed max.

 

[lmeyer]

Actually, the Project Manual trumps the drawings - if there is one.

Contract should/ usually states what document rules in case of conflicting information

 

[cnelk]

Contract should/ usually states what document rules in case of conflicting information

This is way beyond Construction 101 for the OP

From the AIA A201 General Conditions

 

[actionshooter]

From someone who does this all day, every day... keep an open mind and look at it from both sides, could or should the GC have known about a change? If not, that's a valid C/O. If he is pulling the nickel and dime gig where they are sending you a c/o for a couple hours work.... you need to have a conversation. I have a $500 rule, if the client has been good to work with, I don't charge if it's under. If it's over expect them to be fair with me, like I have been with them. This is one of those things where every circumstance truly is different.

 

[doc holiday13]

What does your contract say?

this
and what do the drawings say? because the contractor bid the job with the drawings in hand so if he missed something in his bid, then he needs to eat that unless your contract says it doesn't matter if he missed it. And yes a change order can go both ways.

 

[Laelkhunter]

When we were building our home, the first two change orders were free. Thereafter, any additional were $1500 per change.

 

[Rich M]

A lot of good stuff here - we do a lot of not to exceed projects and when we prepare a proposal it is very specific. Gotta tell the world why we are gonna do what we are gonna do and if something else arises it is easy to point it out as outside the scope of work.

Devil's in the details - read the contract and see what you agreed to. Then ask for all change orders as not-to-exceed and time & materials. It will be PITA for him to keep prepping the T&M invoices and COs will slow down - unless they are necessary.

The money is one thing, I really hate the time extensions. Your project will be done in 4 weeks means 3 months and if it runs past that, augh.

 

[Doc Holliday]

Thanks for all the replies. When I look at the root cause of the largest COs, they can either be attributed to oversight from the Design firm, or to bad luck. Anything not falling into those categories has been negligible. My GC is onsite every single day since the project started in January and I work from home 100% on the other side of a 2x4/OSB barrier, so we talk multiple times per day on most days. He has been swinging a hammer, laying brick, etc. with only 1 helper through much of it, sometimes 2......only when the framers showed up this week did he start to take on more of a manager role. I don't think he is trying to screw me, and I appreciate yalls feedback in reassuring me of that.

 

[Coldtrail]

As has been posted, many contractors give a low bid to meet price point to get the job but list a % to cover contingency knowing that one way or another they will meet that % when the job is complete. It means the customer sees one number but the contractor sees the other with % added and what they expect to make from the job. I've seen up to 25% contingency upcharge written into contracts.