CHANGE MANAGEMENT
PART 1 GENERAL
1.1SECTION INCLUDES
contract
work.
1.2RELATED SECTIONS
1.3REFERENCES
1.4DEFINITIONS
health benefits, worker's compensation, life insurance, pensions and other fringe benefits.
disputed change that has been escalated to the Department’s Region Director and remains unresolved.
directing the Contractor to proceed with new or revised work including an intended payment methodology for the new or revised work
involved efforts or expenses for the cost object.
include instructions or interpretations
value or time duration. Change Management
fault or responsibility of the Contractor, or could not have been foreseen by the Contractor, for which a time extension will be granted.
Department’s control, including delays resulting from change orders, lack of site access, and delayed shop drawing authorization.
caused by conditions beyond the control of the Contractor.
excusable delay caused by force majeure or delays not the fault of the Contractor or Department.
Contractor and the Department independently delay work on critical path activities during approximately the same time period.
installation, but are not directly attributable to the cost object are considered indirect costs, such as overhead, field supervision and vehicles
the control and without the fault or negligence of the Contractor. The Contractor by the exercise of reasonable diligence was unable to prevent, which by way of illustration can include, but is not limited to the following:
natural disaster;
terrorism, civil war or rebellion.
of the Project.
party, its subcontractors or its suppliers and which affect an essential portion of the works but excluding any industrial dispute which is specific to the performance of this agreement.
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the fault or responsibility of the Contractor, or can be reasonably foreseen by the Contractor and for which there is no monetary compensation or time extension.
failure by the Contractor to assign sufficient resources to the work.
equitable adjustment in cost or time if said risk is realized.
change the contract in response to unforeseeable conditions, design changes, and change directives.
in kind, quantity, or nature from that involved or included in the original contract.
work or by their effect cause other work to become significantly different in character.
typically manageable in size and designed for specific applications, like shovels, wrenches, screwdrivers, pliers, hammers, saws, and drills.
material or change to the work that may potentially result in cost or time savings and preserve essential functions and characteristics of the facility such as: service life, economy of operation, ease of maintenance, desired capacity, and safety.
1.5SUBMITTALS
this Section, Article 1.8
Section, Article 1.10
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Section, Article 1.11
this Section, Article 1.15
1.6CONTRACT MODIFICATIONS
work, changes in quantities and alterations in the work as are necessary to satisfactorily complete the project.
contract.
authorizations of the Engineer are included in the contract and not considered significant changes in the character of work.
Contract nor release the Surety.
provided by the Department.
order.
receiving approval from the Engineer.
methods of modifying the contract.
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Table 1 Types of Contract Modifications Document Procedures Results Construction Deviation Requested by the An allowed deviation from Contractor. contract plans and Evaluated by the Engineer. specifications at distinct location Design Change Issued by the Engineer. The Contractor executes the change. The Contractor may submit a Request for Change Order if the payment methodology for the work change is not agreed to. Potential Change Order Prepared by the The Contractor submits the Contractor. effects of the potential Evaluated by the Engineer. change on contract cost, contract time, or both. Request for Change Issued by the Contractor. A change order is issued if Order Evaluated by the Engineer. the Engineer agrees to the terms and conditions of the request. Change Order (CO) Prepared by the Engineer. Documents changes in the Agreed to and signed by contract price and time. the Contractor and then the Department Contractor. Value Engineering Prepared by the Change Order is executed Change Proposal Contractor. if terms and conditions are (VECP): Evaluated by the Engineer. agreed to. Cost savings is shared equally.
1.7INSURANCE CLAIMS
insurance(s) are available to cover costs in connection with the item prior to filing any request for a change order.
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days of filing the insurance claim.
1.8CONSTRUCTION DEVIATION
deviation of a requirement is being sought prior to the work being performed.
deviation is desired
specification or drawing at their discretion if such deviation is deemed to not affect the value of the product.
requirements for the project as a whole.
must be completed by a change order.
1.9NOTICE OF DESIGN CHANGE (NDC)
desired change in the work and states the method of payment.
order.
method of payment is acceptable.
NDC if the Department’s proposed method of payment is unacceptable.
1.10POTENTIAL CHANGE ORDER (PCO)
contract change is likely to occur.
the event or situation occurs.
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additional compensation or time may be due.
compensation may be sought.
required to minimize cost or performance delay.
initiates need for a change order as specified in this Section, Paragraph 1.11 A.
change, condition, or event is discovered or should have been discovered in the exercise of reasonable prudence may limit any contract adjustment, when warranted, to those costs or impacts incurred after notification is received by the Engineer.
claim resulting from the alleged change, condition, or event.
1.11REQUEST FOR CHANGE ORDER (RCO)
associated delay costs.
new work is added that results in a request for additional compensation or time.
variation in a major contract item of work significantly changes how the work would be performed resulting in an increase or decrease in efficiency.
Change Orders.
compensation or time will be due and the date of event occurrence;
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compensation may be sought:
condition, or event.
the change, condition, or event, and equipment that will be idled or added.
performance, procedure, or order.
respond to the notice to reduce project cost, delay, or disruption.
showing the impact of the delay-causing event on the project activity sequences and durations.
1.14 for which a RCO is being sought.
performed which is believed to constitute changed or extra work.
whole or in part on a request by a Subcontractor.
1.12EXCUSABLE DELAY
delay-causing event is identified.
RCO.
will be determined based on a mutually agreed to schedule impact analysis showing lost time attributable to the delay-causing event
costs for operations affected.
daily basis.
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contain:
be delayed, and the cause for delay
following: 1) Document how the extra costs relate to the delay and how they are calculated and measured. 2) Identify all affected project employees for whom costs are being compiled. 3) Use actual internal cost records kept in the usual course of business to justify added costs.
principles.
daily records with those maintained by the Engineer.
Engineer.
the disagreement between Department’s calculations of weekly delay costs.
that Department records are accurate.
equipment idled by the delayed activity.
supervision and field office operating costs or other costs not directly associated with a particular work activity for the period of delay.
includes the cost of home office overheads associated with that change in the project scope of work.
compensation for under-absorbed home office overhead costs: 1) Under absorption actually occurred, meaning there was less revenue overall in relationship to home office costs and that no replacement work was obtained. 2) The under absorption was a direct result of the project.
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3) Specific replacement work could have been reasonably obtained were it not for the alleged delay.
additional costs: 1) The previous five years audited financial statements that include as a minimum the following information:
costs.
each project worked on during the year.
project during each year.
payment for home office overheads is justified: 1) Unabsorbed home office overhead will not be reimbursed for the first ten calendar days of the delay- causing event. 2) Home office overhead costs will be calculated from the eleventh calendar day of the delay-causing event through the events end if the project is between 0 and 90 percent complete. 3) The following formula will be used to calculate home office overhead costs: E = D [0.03(A)/C] Where: 0.03 = Allowed markup for home office overheads A = Original contract value C = Total contract duration in calendar days including approved time extensions D = The agreed upon number of calendar days the project is delayed due to the delay-causing event minus ten E = Total reimbursable amount for unabsorbed home office overhead 4) Home office overhead will be reimbursed if the delay occurs after the project is 90 percent complete.
1) Profit. 2) Loss of profit. 3) Labor inefficiencies. 4) Consequential damages, including but not limited to, loss of bonding capacity, loss of bidding opportunities, and insolvency. 5) Any indirect costs or expenses. Change Management
6) Attorney’s fees, claims preparation expenses, or litigation costs.
the daily agreed to costs for direct costs, field indirect costs, and unabsorbed home office overhead costs as computed according to this article for the duration of the delay.
compensable delay when the Contractor provides documentation that the weather conditions:
time period;
severe weather at the project location warrants entitlement to a time extension.
weather data (such as precipitation, temperature, or snowfall) for the affected time period with historical weather data for the same time period. 1) Refer to the Daily Values at the Prism Climate Group website to download historical temperature and precipitation values for the project location. Refer to http://www.udot.utah.gov/go/standardsreferences
no more than 10 years to:
at the project site limited the ability to perform work.
and that the critical path was affected. 1) Non-critical path work will not be considered a non- compensable delay for unusually severe weather.
1.13DIFFERING SITE CONDITIONS
conditions, unforeseen condition or events (such as force majeure and foreign or domestic tariffs) that may result in a request for additional compensation or time.
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contract.
otherwise when differing site conditions on the project are encountered.
change, condition, or event, to the extent possible under the contract.
days of receiving the RCO to do one of the following:
necessary, direct how the work will proceed.
work will proceed.
whether to confirm or deny the change, condition, or event and indicate what additional information is necessary for further review and the date by when it must be received. 1) Any contract adjustments will exclude increased costs or time extensions resulting from failure to provide the requested information.
work to be performed.
contract.
associated field indirect costs, home office overheads, profit, and all other costs incidental to the work unless otherwise defined in the contract.
estimate to do the work as validated by the Engineer. Support the price with a detailed cost estimate that includes the following information:
applied to the estimated man hours.
them available upon request of the Engineer.
invoices.
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rates.
1) Rental rates obtained from the Rental Rate Blue Book for Construction Equipment according to this Section, article 1.16. 2) Actual cost of the equipment to the Contractor based on internal equipment billing rates or actual rental rates supported by rental agreements for equipment applied to the estimated equipment hours.
these costs or make them available upon request of the Engineer.
expenses.
expenses including bonds, small tools, home office overheads, profits, and incidental costs associated with the revised work.
allowed on work performed by subcontractors:
then
Engineer.
the Critical Path, of the project.
1.14NEW WORK OR CHANGE IN CHARACTER OF WORK
changes in quantities and alterations in the work are necessary to complete the work and result in new work or a change in the character of the work.
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if the alterations or changes in quantities result in a significant change in character of work under the contract.
work.
account provisions if a basis for adjustment cannot be agreed upon.
due to unbalanced allocation among the contract items will not be compensated.
quantity of a major contract item of work, as defined by Section 00570, is within 25 percent, either higher or lower, of the original bid quantity, and the alterations or changes in quantities do not represent a significant change in the character of work to be performed under the contract.
contract quantity is limited to the actual quantity of work performed.
establishing the adjustment.
at the request of either party.
portion in excess of 125 percent of the original contract quantity.
recovered by payment made for 125 percent of the contract quantity and excluded from any adjustment to that portion in excess of 125 percent of the original contract quantity.
at the request of either party.
the critical path of the project.
1.15VALUE ENGINEERING CHANGE PROPOSAL
equally shared.
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performing the work. Discuss the comparative advantages and disadvantages of each.
revisions to the original contract.
contract and under the VECP.
contract completion time.
conditions, result, dates, project numbers, and the Department’s action on the VECP if previously submitted.
manner.
when there is insufficient review time for a response.
adjustment to the contract based on the additional review time necessary and its effect on the schedule.
the Department regardless of their approval.
conditions:
rights provided by law with respect to patented materials or processes such as 1) Preventing the Department from duplicating or disclosing any data necessary to use the VECP. 2) Preventing the Department from the general use on other contracts.
evaluation or investigation, or that is inconsistent with project design policies or criteria, or at the discretion of the Engineer.
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anticipated profits, or increased material or labor costs will not be permitted if the VECP is rejected or if additional information was requested and not submitted.
items when it is reduced as part of a VECP unless it can be tied to a reduction in contract time.
by the Department.
savings approved in whole or in part.
items or new agreed price items, as appropriate.
percent of the savings between cost of the revised work or substituted material and the original bid price.
implement the VECP.
1.16FORCE ACCOUNT
compensation cannot be negotiated for changed or added work or for the convenience of the Department.
complete compensation for the work performed.
direct costs, including bond.
percent.
force account work.
representative for these records daily.
available to the Engineer upon request.
the Contractor can demonstrate the actual cost.
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verified invoices and accounting record.
installed as part of the force account work.
representative for these records daily.
by either of the following:
billing rates or actual rental rates supported by rental agreements. 1) Provide accounting records substantiating these costs.
1) Hourly rental rates are determined by the monthly rental rate found in the Rental Rate Blue Book for Construction Equipment divided by 176. 2) The total hourly rates have been computed from equipment costs currently in effect and do not include costs for operating personnel. Obtain this publication through: Equipment Watch 1735 Technology Drive, Suite 410 San Jose, CA 95110-1313 Phone: (800) 669-3282 Fax: (800) 224-3527 Refer to http://www.udot.utah.gov/go/standardsreferenc es. 3) The rates require adjustment by a Regional Factor and a Depreciation Factor with operating and standby rates established as follows:
actually in use.
costs adjusted for depreciation and region factors.
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required to be at the work site but not operating.
ownership and operating costs computed above.
must be approved in writing by the Engineer with a maximum of eight hours per day or 40 hours in a week. 4) The Department uses the shown capacity that is closest to the manufacturers when the manufacturer’s rated capacity falls between those shown in the Rental Rate Blue Book for Construction Equipment. 5) Agree upon all rates in writing before beginning work. 6) Obtain approval from the Engineer for any equipment rental rates not provided before the start of any force account work. 7) The Department allows move-in and move-out transportation cost for a piece of equipment not available on the jobsite, if the particular piece of equipment is not moved onto the job under its own power.
for equipment moved to the site under its own power.
for any particular piece of equipment except in unusual circumstances that must be justified in writing and agreed to by the Engineer. 8) The equipment may be rented from a local source when the required equipment is specialized and not available in inventory or is in the available inventory but not on the project site.
Engineer for approval where the rental rate charged exceeds the rate determined by the Rental Rate Blue Book for Construction Equipment.
owned may be considered when comparing rental costs of equipment obtained from local sources when the equipment is to be used less than a week.
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locally rented equipment is less than using equipment owned, including move-in and move-out charges.
indicating the method used was the least expensive.
equipment based on the Rental Rate Blue Book for Construction Equipment if equipment rented is of a type that is owned and the rental costs exceed that allowed by this article.
the force account work.
representative for these records daily.
this Article above.
issue, on force account work performed by subcontractors:
then
and equipment charged to the force account work.
1.17CLAIMS REVIEW BOARD
requested, as provided in this article.
of submitted claims, written findings, and recommendations to the Department's Deputy Director.
Associated General Contractors (AGC) Change Management
complying with all Contract terms and conditions, and does not waive any notice or timeliness requirements.
CRB when deemed to be in the best interest of both the Contractor and the Department based on the request for a higher-level review.
counsel.
when using legal counsel.
decides to use legal counsel.
allowed to make brief opening and closing remarks and advise their clients.
will be permitted.
meeting will be the responsibility of each party.
from the project, presentation preparation, presentation time, or any other activities associated with the preparation for or participation in the CRB process will be given to either party.
statements describing the claim and each party's position with reasoning and submit to the Department’s Director of Construction or designee, a minimum of 14 calendar days before the scheduled presentation, who will distribute them to the other party a minimum of 10 calendar days before the scheduled presentation.
Construction or designee who will distribute it to the other party a minimum of 10 calendar days before the scheduled presentation, if either party chooses to prepare a visual presentation.
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claim if either the Department or the Contractor fails to appear before the CRB on the date and time scheduled for the presentation without justifiable cause.
Department.
the Claim meeting is scheduled and will be agreed to by both parties.
of the claim.
discussed in the hearing.
or claims are permitted if the Contractor or Department attempts to submit new information.
Department to present their positions, and for all parties to exchange questions and answers.
the procedures and format of the meeting.
previously submitted information and documentation. 1) The presentation can be verbal or visual.
by previously submitted information and documentation. 1) The presentation can be verbal or visual.
nor will they be allowed after the conclusion of the meeting.
within 45 calendar days of the claim hearing if the offer is less than the amount required to be reviewed by the Transportation Commission.
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final.
available.
the claim is rejected, or if the sum tendered by way of settlement is not acceptable to the Contractor.
acceptance or rejection of the offer or rejection of the claim within 14 calendar days of the date of the Department Deputy Director's offer.
payments or contract changes if both the Department and Contractor agree to resolve the Claim.
1.18CLAIMS RECORD KEEPING
incurred for any alleged claim.
as required to determine the facts or contentions involved in the claim.
payment.
1.19CLAIMS AUDITING
following filing the claim.
conduct the audit.
calendar days after notice is provided if more than 60 calendar days after the project acceptance date of the contract have elapsed.
normal business hours.
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verify all or a portion of the claim or to permit the auditor access to the books and records constitutes a waiver of the claim and bars any recovery.
and supply acquisition contracts.
and journals together with all supporting documentation pertaining to entries made in these ledgers and journals.
performance of the work.
establish the actual cost of owning and operating equipment used in performance of the work.
on which the bid was based - Exclude documents placed in escrow.
documents that support the amount of damages as to each claim.
components for items of the claim including, but not limited to, labor, benefits and insurance, materials, equipment, subcontractors, all documents that establish the time periods, individuals involved, and the hours and rates for the individuals.
assess the validity of a claim.
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precedent to the right to seek judicial relief.
PART 2 PRODUCTS Not Used
PART 3 EXECUTION Not Used
END OF SECTION
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