Proceeding on a change before the price is agreed
At Thursday's site meeting the owner's representative hands you a signed directive for a two-storey visitor centre: build the main stair to the architect's revised sketch, starting Monday, price to follow. The fabricator has already cut stringers for the old design, and the owner will not wait for a quote.
Check the written direction, propose the valuation in writing, open a separate cost code and daily records, and keep the time effect open before work starts. Seek agreement on price without assuming you may postpone a direction your contract requires you to follow. Fisheries and Oceans Canada's 2011 conditions, for example, require prompt performance of a written change order and, where price is determined afterwards, use eligible costs actually spent or legally payable plus a 10 per cent allowance for profit and other costs, including overhead.
- Check the directive: written, signed by someone the contract allows to order changes, and attaching the drawings it relies on.
- Reply the same day: you are proceeding, you expect an adjustment of price and time, and you propose the valuation — a lump sum once the design is fixed, unit rates, or recorded cost plus the contract's markup.
- Seek a ceiling or an estimate with a review figure; US federal policy calls for a ceiling price unless impractical when cost could rise significantly and there is no time to negotiate.
- Open a separate cost code before work starts, and have every foreman and trade book the change's hours, materials, rentals and scrapped items to it.
- Record each day on its own time and material sheet, signed that day, and price it from those T&M records.
- Keep time open: add the change's activities to the schedule and submit their effect once it can be measured.
Common mistakes
- Rushing out a lump sum before the design is fixed, to skip the record keeping.
- Letting crews book directed work to base-work codes "for now".
- Signing sheets weekly, when nobody can check the hours.
Action list
Before the first directed hour
- Check who signed the directive
- Reply in writing with the valuation method
- Agree a ceiling or a review figure
- Open the cost code and brief the crews
- Daily sheets signed the same day
- Time impact kept open in writing
Check your understanding
Three weeks into a directed change, the owner wants a lump sum to close it out: $22,000 is spent and about half the work is left. What do you offer?
