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.
Massachusetts Compensation for Change Orders and Builder Allowance Overages: In Massachusetts construction projects, change orders and builder allowance overages are common occurrences that can impact both the builders and the clients. Massachusetts compensation for change orders and builder allowance overages refers to the monetary arrangement made to address any alterations or additions requested by the client during the construction phase, as well as any expenses exceeding the allocated allowances. The first type of compensation for change orders in Massachusetts is known as a fixed-sum change order. Under this arrangement, both parties agree upon a set price for the requested change, and the builder incorporates this change into the existing contract. This can include modifications to the design, materials, or scope of work. The second type is time and material (T&M) compensation for change orders. In this case, the builder charges for the actual cost of materials, labor, and other resources required for the change order and receives compensation based on a predetermined hourly rate or a fixed markup. Massachusetts compensation for builder allowance overages deals with situations where the actual expenses incurred exceed the originally allocated allowances for certain aspects of the construction project. Common allowances subject to overages include flooring, fixtures, appliances, and finishes. If the client selects products or services that exceed the predetermined allowance, they may be responsible for compensating the builder for the difference. To ensure transparency and fairness, it is crucial for both builders and clients to establish clear guidelines and provisions regarding compensation for change orders and builder allowance overages in their contract. These provisions should cover the process of requesting changes, pricing mechanism, dispute resolution, and any additional terms and conditions specific to the project. In conclusion, Massachusetts compensation for change orders and builder allowance overages encompass different types of arrangements, including fixed-sum change orders and time and material compensation. It is vital for builders and clients to establish a written agreement that addresses these provisions to ensure a smooth construction process and avoid any potential conflicts.
