POLICY: Change Order to Subcontractors and Purchase Orders

PURPOSE: To have a typed agreement to address revisions to the original Subcontracts and Purchase Orders using an Excel spreadsheet.

RESPONSIBILITY: Project Manager

PROCEDURE: Change Orders are important contractual revisions. They document a change to the original agreement reached with a subcontractor or vendor. The same care should be taken as with the original contract discussions during change order negotiations. Confusion, misunderstanding, and gaps during change order negotiations are just as dangerous to the success of the project as are those same problems during original contract negotiations.

1. Any change in price or a scope of work that affects a Subcontract or Purchase Order requires a Change Order. It is important to understand there does not have to be a change in price to require a Change Order. Significant changes to the scope or contract terms that do not involve money should be issued as “no cost” Change Orders.

2. The Project Manager will type the Change Order (Form O.P.M.-40) using the Excel spreadsheet. The request should be neat and include a copy of the quote or the document that backs up the change. The Project Manager will also prepare (typed or handwritten) an Analysis of Purchase as backup for this Change Order.

3. No other “legal terms” should be addressed. The “legal terms” are included in the body of the original agreement.

4. The Project Manager will print the Subcontract or Purchase Order using a white, green, yellow, and pink copy.

5. Once printed, the Project Manager shall log-in the Change Order in the Buying Schedule maintained in Timberline Project Management Program.

6. Routing and review will be identical to Policy O.P.M.-20 and O.P.M.-30.

7. No Change Order will be entered into accounting until fully executed. If a deductive Change Order is being issued, the Project Manager is responsible for alerting accounting to ensure there is no over payment to the subcontractor or vendor.

8. If the Change Order involves work requested by the owner, no work is to be authorized or Change Order issued to a subcontractor or vendor until written authorization is received from the owner.

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