Change Order

[cdevera]

Dear All

A client issues a change order to the contractor, however the contractor believes that the valuation of the change order is very low. How is the contractor going to address this issue?

a) Accept the change order and submit a claim
b) Reject the change order and submit a full claim
c) Any suggestions/opinions from you guys...

I would appreciate any suggestions, comments, or enlightenment...

Thanks!

[pmkb]

If the valuation difference is large, they should talk to the owner about it up front or risk a protracted negotiation holding up payments IMO.

[cdevera]

Stacy

Here is the prelude, previously the contractor was issued a Notification of Change by the employer/engineer and was requested to submit a proposal for the said changes. The contractor then submits his proposal with a total $ value. However, as time passed by the employer/engineer informed the contractor that the Notification of Change will be replaced by a change order. Now that the change order has been issued, the change order $ value represents only the on-site manpower resources under the general requirements yet the descriptions in the change order includes additional scope as well.

In the contract this is what it says:

"In the event the contractor does not agree the terms of a Change Order issued pursuant to subclauses 3 and 4 above, Contractor may pursue the matter in accordance with the provision of the General Contract titled ’Claim’. However, notwithstanding any such claim, Contractor shall, proceed diligently with the Change Order work."

Is it wise to simply reject the CO then submit a full claim or accept the CO and then claim the rest?

[pmkb]

I suppose that depends upon the relationship (and business history) between the contractor and owner.

[cdevera]

pmkb

I agree.. but things doesn't seem to be that way

[ProModeler]

Get out there and discuss it. Everything is negotiable.