Change Order In Construction

2.1 Introduction:

“What is a change order? A change order is a written agreement between the owner and the general contractor to change a building or other construction contract. Change orders add to, delete from, or otherwise alter the work set forth in the contract documents at the time that the construction contract was made. As the legal means for changing contracts, change orders are standard in the construction industry. A change can occur at any stage of a construction project. According to Thomas and Napolitano [2] and Ibbs [3], causes for change orders vary greatly, thus making the task of change management difficult for most clients. (Leonard et al).

2.2 Basic of change

“A change is defined in literature as “any deviation from

Any modification to a construction contract after a contract award is called a change order.

Contractors will receive the package of the contract in the form of drawings, plans, equipments lists and various other documents. Then, the contractor should be able to calculate the labor cost, material cost, and schedule based on the original package that they received.

Changes can be initiated by all parties in the construction process. All changes, however, must be approved by the owner before implementation. ( CII Publication 6-10 (1990) ) .”

2.3.1 Types of change

It also includes the unit price for each item. Where the final price of the project depends on the quantities needed to finish the work.

3- The cost plus contract A contract agreement where the purchaser (the buyer ) pays the full cost of all labor and materials, plus an amount for contractor overhead and profit (which is usually a percentage of the labor and material cost). This type of contract is preferred when there is uncertainty in the scope of work, or when the types of the materials, labor, and equipments are being similarly uncertain in nature.

4- Incentive contracts

Incentive contracts feature compensation which depends on the contracting/engineering performance in accord with an agreed target, schedule, quality, and/or budget.

5- Percentage of construction contract

This type is very common for engineering contracts, where the compensation that is involved in such a contract is based on a percentage of the total cost of construction.

2.5.1 The Human Factor: Productivity