Section 12.33 Disruptions and Change Orders

• Library: Construction Law 2016 Supp

VII. (§12.33) Disruptions and Change Orders

Change orders are a regular occurrence on any construction project—more complex projects can have hundreds of them. More likely than not, a change order addresses additional work for which the contractor will be compensated in time, money, or both. Normally, a percentage for overhead is allowed on change order costs for increased scope of work. But the extra work encompassed in a change order may delay the project beyond the actual time needed to perform that extra work, thus giving rise to a claim for extended overhead above the overhead allocated on the change order. The same applies to ripple-effect increases in labor, equipment, and other direct project costs. For example, extra work could disrupt the planned sequence, extend the project to a low-efficiency cold weather period, or otherwise disrupt planned productivity. Therefore, when agreeing to a change order, it is prudent for the contractor to reserve its right to claim extended overhead and other impact costs until the full impact of...