(A) Change orders amend the contract by adding or deleting work, making reimbursement for additional costs incurred, making material substitutions and changing specifications. Only work necessary to complete the project as originally intended may be added by change order.
(B) All significant change orders must be approved by the Service Committee or CE prior to the contractor performing the work. Should the contractor perform added work prior to receipt of written approval, reimbursement may be denied.
(C) Prior to contract award, the DOE will submit for City Council approval a change order review process. It is the Service Committee’s intent to only review contract changes of significance, not simple quantity adjustments. The Service Committee’s level of review will be a function of contract size, complexity, the DOE’s experience, prior construction contract administration experience and the city’s ability to fund the project should the cap be exceeded. Contract changes that establish new items of work will receive more review than extensions of existing as bid work items.
(D) When the DOE through its CE is satisfied with the proposed change order, the CE will forward the change order to the Service Committee for review and/or approval. The Service Committee will confer with the DOE coordinator, if necessary, to assure the applicability of federal, state, county and/or local funding for the change order. A change order is prepared and processed for any of the following reasons:
(1) An increase or decrease in any of the contract pay items;
(2) Changes in the work which were not originally delineated in the contract such as revised design considerations;
(3) The addition of a new or modified pay item required to complete the work in accordance with the contract;
(4) Changes caused by outside agencies such as utilities and the like;
(5) Payment adjustments due to contract provisions;
(6) Quality changes to meet field conditions;
(7) Plan errors;
(8) Suspension of work;
(9) Final measurements/calculations; and
(10) Settlement of a dispute or claim resulting from any of the above reasons.
(E) The change order must provide sufficient explanation to ascertain that the work is necessary, consistent with specifications, within the scope and intent of the contract agreement and approved by the DOE or Service Committee. If the change order is approved by ODOT and FHWA and/or state funds are available above current ODOT project encumbrances, but under the project capped amount, funding may be permitted. Funding of change orders not approved or for which no remaining FHWA and/or state funds remain, is the sole responsibility of the city.
(F) The processing of change orders usually begins with the recognition of a need for a change order at the project level. There is usually communication between the contractor and the DOE. If all parties agree that a change order should be generated, a decision is made as to the type of change order that is needed.
(G) Note that the performance of extra work or additional quantities of work may warrant an extension of contract time. Extensions of contract time may involve additional direct project overhead cost.
(H) Once the need to perform extra work on a project has been identified, a basis of payment for this work must be established. The two types of pricing for extra work are usually agreed unit price or force account price.
(I) Agreed unit price is used when the extra work can be broken down into measurable units. The number of units necessary to perform the work is estimated and a unit price determined and agreed upon. The agreed upon unit price should be a unit price already established in the contract or comparative pricing may be used. The DOE may reference ODOT’s website of average bid prices to assist with this effort.
(J) Force account price is used when the work cannot be broken into measurable units or when a unit price cannot be agreed upon. This method reimburses the contractor the actual costs of labor, equipment and materials incurred in the performance of the work including allowable overhead and markup. This method requires a significant amount of record keeping.
(K) The records required for force account pricing of extra work must accurately depict all labor, equipment and materials used by the contractor to perform the work. The Blue Book for heavy highway equipment costs with the ODOT procedure for establishing appropriate equipment costs shall be utilized as per the 2002 ODOT C&MS, § 109.05. The items that are necessary to record are shown below:
(1) Description of work;
(2) Contractor’s work force;
(3) Employee name;
(4) Classification;
(5) Hours worked - regular and overtime;
(6) Contractor equipment:
(a) Type;
(b) Model;
(c) Age;
(d) Capacity hours worked; and
(e) Hours idle;
(7) Materials:
(a) Description; and
(b) Quantity;
(8) Invoices.
(L) Quantity Measurements.
(1) The DOE shall record the measurements of the quantities of work in the units prescribed by the plan actually performed by the contractor. Change orders must be prepared to make adjustments for any differences between contract quantities and the quantities actually performed.
(2) Issues of efficiency or other similar factors may arise that may impact unit costs when the quantities actually performed differ significantly from those shown in the plan. For these occurrences the quantity records shall be thorough enough to determine actual production rates and other such items.
(Ord. 131-05, passed 10-17-2005)