Change Orders $$



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    Kurt Fanderclai (Edited )

    I don't have the PPI, however:

    For 527, that is straightforward -- the contract specs define the procedure -- in this case, it should be labor and materials PLUS the 20 and 5 percentages.

    For 603 -- an allowance includes the material or "thing" and the delivery and taxes.  BUT....not loading or unloading, or installation, or OH&P.  So the item in 603 -- the material or "thing" -- cost more to purchase and deliver -- hence the Change Order.  BUT...the contractor would've already added unloading, installation, and OH&P into the contract sum for the same type of material or thing, albeit a cheaper one.  So the only increase is the additional cost for the higher cost of the material or object.

    "And then again in Question 604, when the tenant decides to change the flooring from ceramic tile to VCT (a reduction in cost), the correct answer for the change order does not include the contractor's 15% for overhead and profit, only the difference in cost for materials & install."

    This one has always seemed like an interesting subtlety to me -- the contractor's OH&P stays intact, and does not get reduced.  I think the reasoning is that the contractor would have already incurred expenses in the procurement process for the original material -- so even if the material/labor goes down, the OH&P stays the same.       

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    Kellie Locke

    Kurt - I'm wondering if I could jog your memory on this old post, I see you're still active on the forum, and I'm struggling with these exact questions as well!

    Your rationale for questions 527 & 604 is helpful, and I think I understand what's going on with those. But the answer for 603 still seems wrong to me. Section 3.8 of A201 addresses allowances, and states that when actual costs differ from the stated allowance amount, "The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Section and (2) changes in Contractor's costs under Section"

    OH&P are Contractor's costs as identified in section And it seems in line with other A201 provisions that if the amount of the contract sum went up because the actual cost was greater than the allowance, the Contractor is entitled to OH&P  on the cost of the change order. 

    I understand the labor rate doesn't change just because the item was more expensive than the allowance. However, it seems clear that profit should be added. I don't think these provisions changed 2007 > 2017 contract editions. Is there something I'm missing?

    I'd love to hear what you think if you're still following this thread!

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