University of Alabama - Construction Administration Manual ... · University of Alabama - Construction Administration Construction Procedures Manual TAB 8 - CHANGE ORDER PROCEDURES

University of Alabama - Construction Administration Construction

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TAB 8 - CHANGE ORDER PROCEDURES - NEW GEN CONDITIONS (4) Page 1 of 11Revision Date: 02/13/08

TAB 8 Change Orders


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CHANGE ORDERS

Title 39 Reference In accordance with the Alabama Competitive Bid Law (Section 41-16-50, Code of Alabama, 1975), all expenditures of public funds for labor, services, or for the purchase of materials, supplies, or other personal property or lease of such items involving $7,500.00 or more shall be made only after a free and open competitive bidding process has been completed. Under Title 39 of the law, all public works projects which include the construction, repair, renovation, or maintenance of public buildings, structures, sewers, waterworks, roads, bridges, docks, underpasses, and viaducts as well as any other improvements to be made that are in whole or part paid with public funds must also be awarded through the competitive bid process if such projects involved $50,000.00 or more. In accordance with the General Conditions of the Contract Documents Sections 19, 20, 21, and 22 the Owner and/or Contractor has the right to make changes in the Work. These changes will become legal and binding and a part of the Contract Documents once the Change Order process is complete and all forms have been executed. Therefore, the majority of this section will explain how to properly fill out the forms needed to execute a Change Order. Since a Change Order is a legal document it must be executed by someone from each side with the authority to bind each side. It must also have the Contractor’s Consent of Surety with Power of Attorney to be valid. Five (5) original sets of Change Order forms are required for processing. In this section there will be no blank forms presented. When needed, the UA Project Manager or A/E will supply the proper form(s). Therefore this section includes properly filled out examples only:

1. Change Order form 2. Consent of Surety or Letter with Power of Attorney 3. Change Order Justification form (COJ) 4. Change Proposal Request (aka Request for Proposal) 5. Recapitulation sheet provided by Contractor’s 6. Subcontractor’s Breakdown form

Each of these are explained in detail below: Change Order form – Initiated at the direction of the UA Project Manager and prepared by the designer (A/E). The Designer will transmit five (5) originals to the Contractor for his review, obtaining consent of Surety, and execution. The Contractor will submit all five (5) originals to the UA Project Manager for processing and final Owner execution. Appropriate distribution of fully executed documents will then occur to all parties. Upon receipt of the fully executed document, the Contractor may include the Change Order Work in its next month’s partial payment request (see Tab 7).

1. All fields must be filled out properly. 2. All math must add up. 3. Consent of Surety must be signed and sealed with accompanying Power of Attorney. 4. A/E must sign. 5. General Contractor must sign. 6. UA Project Manager must sign. 7. UA AVP for Financial Affairs will be last to sign. 8. Use standard form provided by Owner or Designer.


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Consent of Surety (Power of Attorney)

1. Original sealed Power of Attorney must accompany Change Order form for person giving Consent of Surety.

2. A “Blanket Letter of Approval” may be substituted for the Consent.

Change Order Justification form

1. A/E generates and signs (standard form to be used). 2. Sections 1-7 must be filled out completely and accurately to reflect the requested change. 3. UA Project Manager must sign.

Change Proposal Request (aka Request for Proposal)

1. A/E generates and signs . 2. Detailed instructions on what the proposal covers. 3. Recommended for all Change Orders (not required on small projects).

General Contractor’s Recapitulation sheet

1. General Contractor, in response to the A/E’s Request for Proposal, gives a detailed breakdown of labor (w/ burden separate), materials, and equipment.

2. Contractor must comply with Section 19 (i.e. no markups on Sales/Use Taxes, no markups on markups, maximum markup between GC and Sub 25%, etc.).

3. GCs Overhead Profit (maximum 10%) must be on the Subcontractor’s Direct Costs; not base amount plus Subcontractor’s markup.

4. Sales/Use Tax is calculated only on the material costs at the contract rate (see Owner Contractor Agreements).

5. All deductive Change Orders shall be the net cost to the Contractor, excluding project overhead and profit.

6. Contractor may use own recapitulation sheet but must provide details as noted above. Also, the University’s project name and number must appear on the sheet. A sample form is provided for information only.


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Subcontractor’s Cost Breakdown form

1. The University’s Subcontractor Change Proposal/Cost Breakdown form MUST be used. A sample is included.

2. Only one category should be listed per line item (Ex. Labor costs should be on separate line from material costs)

3. All backup to this form MUST be on Subcontractor’s letterhead. 4. All breakdowns shall include materials, sales tax on materials, labor, burden on labor, and

equipment. 5. The Contract and General Conditions of the project should be reviewed for the approved

Burden. 6. The Burden percentage applies to Labor costs only. 7. The Overhead & Profit percentage applies only to Direct Costs (material and labor) and is

limited to 15% maximum for the subcontractor. 8. Sales/Use Tax percentage is calculated only on material costs. 9. No lump sums will be accepted.

Note: If accessing this manual electronically please be advised that for this Change Order section only the Owner and/or Designer will provide the proper forms to be used.


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