Change Orders are instructions to revise construction plans after they have been completed. Change orders are common to most projects, and very common with large projects. After the original scope (or contract) is formed, complete with the total price to be paid and the specific work to be completed, a client may decide that the original plans do not best represent his definition for the finished project. Accordingly, the client will suggest an alternate approach.
Common causes for change orders to be created are:
" The project's work was incorrectly estimated;
" The customer or project team discovers obstacles or possible efficiencies that require them to deviate from the original plan;
" The customer or project team are inefficient or incapable of completing their required deliverables within budget, and additional money, time, or resources must be added to the project; and
" During the course of the project, additional features or options are perceived and requested.
Kansas Compensation for Change Orders and Builder Allowance Overages refers to the legal provisions and procedures that govern the financial aspects of construction projects in the state of Kansas. When changes are made to the original scope of work or when allowances provided to the builder are exceeded, compensation policies come into play to determine the reimbursement or additional payment required. In Kansas, compensation for change orders involves any modifications or alterations made to the original construction plans, specifications, or contract provisions after the contract has been signed. Change orders may be requested by the owner, architect, or contractor due to design changes, unforeseen conditions, or modifications to meet the owner's requirements. These changes often result in additional costs or time delays. The compensation for change orders ensures that these extra expenses are properly accounted for and reimbursed according to the agreed-upon terms. Builder allowance overages, on the other hand, refer to situations where the costs associated with specific items or materials exceed the originally allocated allowance. When a project is initiated, the builder is often provided allowances for certain aspects such as fixtures, finishes, or equipment. These allowances act as caps on the budget for those specific items. However, if the actual costs of these items surpass the initial allowance, the builder may request additional compensation to cover the overages. Kansas provides several types of compensation for change orders and builder allowance overages. These include: 1. Lump Sum Change Orders: This type of compensation involves a fixed amount agreed upon between the owner and the contractor for the change order. The payment does not depend on the actual costs incurred but is instead determined through negotiation or a pre-agreed schedule of values. 2. Time and Material Change Orders: In certain cases, particularly when the scope of a change order is uncertain or difficult to estimate accurately, compensation may be based on the actual time and material required for the change. Such change orders necessitate detailed documentation of labor, materials, and equipment used, along with agreed-upon rates for labor and markup for materials. 3. Cost-Plus Change Orders: This compensation method follows a cost-plus-profit approach. The contractor is entitled to reimbursement for the actual costs incurred, typically supported by receipts or invoices, along with an additional agreed-upon profit margin or mark-up percentage. When it comes to builder allowance overages, additional compensation may be determined through a similar set of methods, depending on the terms outlined in the construction contract. It is crucial for both parties to carefully review and negotiate these compensation provisions beforehand to avoid any disputes or misunderstandings during the construction process. By following the specific compensation policies for change orders and allowance overages in Kansas, construction projects can be effectively managed and ensure fairness for both the owner and the builder.
