Changes and Modifications

Changes and Modifications

Construction contracts typically provide for changes by including a "change order" clause. Generally, the owner, architect, and contractor must agree on a change order. However, the owner has the right to direct a change in the work without an agreement with the contractor if the change is within the general scope of the contract. The architect alone has the authority to order any minor change in the work. The AIA General Conditions Form A201, Article 7, provides for such authority.

Construction contracts also typically include a requirement that all changes be in writing. The parties can agree to waive the writing requirement; however, such a waiver will most certainly pose a major problem with regard to documentation if a dispute arises as to a particular change order request.

In addition to change orders, "extras" play a large role in contractors' performance on public works construction projects. Extra work provisions may be inserted in the contract by the public entity. If the work to be performed is extraneous and not related to the original bid or contract, the contractor may have the right to refuse to perform, as beyond the scope of the contract.

If the contractor chooses to perform extra work, it will, of course, seek extra compensation. Public works contracts almost always provide for payment for extra work. Such provision typically requires a contractor to obtain a written extra work order that specifies the amount to be paid for the extra work and is signed by a public agency representative. In addition, an extra work provision may be nullified if the contractor can show the public agency fraudulently concealed material facts.

Numerous other provisions address the actual construction phase of a public works project. For example, the AIA General Conditions Form A201, Article 4.3.7, provides a standard provision for a claim for additional costs due to a change order. This provision states the contractor must submit a written estimate of the work prior to commencing with the change. Also, regarding extras, if the validity of an extra work claim is undisputed, Government Code § 980 provides for interest to be paid at a specified rate upon payment for the extra work.

There are limits to the amount of changes that may be made under various California Statutes (e.g., Public Contracts Code § 20455, limiting changes to $25,000, plus 5% of the contract amount above $250,000, not to exceed an aggregate of $150,000 for projects under the Improvement Act of 1911.)