A variety of reasons may cause an increase or decrease in the amount of work from the scope of work specified in the original contract. These reasons result in either directed changes or constructive changes to the project’s scope of work. This article briefly describes each of these main categories of changes. It also outlines the potential implications of changes to a contract scope of work from the time, cost, and productivity perspectives.
In general, owners have the contractual right to make changes to the scope of work outlined in the original contract. Since owner changes impact contract scope of work and they potentially have time, cost, and productivity implications, it is important to identify various types of change in project scope of work and recognize potential effect of each type of change on project contracts. Examples of the most common changes include:
- Changes in means and methods or material to be installed
- Differing site conditions not envisioned in the original contract price
- Modifications that change the planned work sequence as originally envisioned
- Changes to the scope of work due to constructability issues or conflicts between systems
- Changes in construction, prescriptive, proprietary, or performance specifications
- Corrections made due to errors or omissions
- Modifications as a result of the actions or inactions of third-parties
A directed change is issued when the owner specifically directs the contractor to make a change. This type of change may or may not affect the contract price. A directed change that influences only the schedule is an example of a directed change with no effect on the contract price. As another example, a directed change that impacts a project’s configuration, work sequence, or space requirements may adversely influence labor and equipment productivity on-site. A directed change with cost impact may reduce or add the contract price. Directed changes are typically not complicated because the owner specifically directs the contractor to make a change and as such, directed changes are easier to recognize.
Constructive changes, on the other hand, occur as a result of non-owner-directed events that implicitly necessitate modifying the scope of work. Unlike directed changes, the owner does not specifically direct the contractor to make a change in case of a constructive change. Instead, as a result of non-owner-directed events or actions or inactions of the owner, the contractor is forced to modify the scope set forth in the contract. Typically, constructive changes are not easy to recognize because they generally occur due to non-owner-directed events or circumstances. In addition, in case of a constructive change, the owner does not typically have explicit acknowledgment of a change to the original scope of work set forth in the contract. Examples of the most common types of constructive changes include:
- Verbal communications that implicitly necessitate making changes
- Deficient drawings or specifications
- Ambiguity in architect-provided responses to information requests
- Differing site conditions
- Over-inspection
It is important to identify changes in a timely manner, especially in case of constructive changes whose effects are not explicit and readily recognizable. The reasons for each change need to properly be identified and documented in proper change management logs. Moreover, the effects and implications of each change need to properly be documented to ensure sufficient documentation and historical records are readily accessible to substantiate contractual entitlements. If your project has been affected by multiple change orders and they have adversely affected labor or equipment productivity on-site, or if you are interested to investigate the extent of time and cost impacts due to change orders, Adroit will be able to assist in assessing these impacts. For more information, please contact us.
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