Change Order Training. March 2, 2004
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1 Change Order Training March 2, 2004
2 Change Order The purpose of a Change Order is to communicate and record changes in the Contract Amount, Milestones and/or Contract Time. 45 days from Change Order Proposal to approval of Change Order
3 Change Order Policy Individual Change Orders may not exceed 10% of the original contract price before securing additional bids California law prohibits splitting or separating any change order work into smaller work orders for the purpose of evading these limitation
4 Training Topics Requests for Proposal (RFP) Owner Initiated Scope Changes Change Order Proposal (COP) Change Order Processing Distribution of Change Order Documents DSA Review and Approvals Alternative Means to Price Change Orders Change Order Tracking (Expedition)
5 Request for Proposal (RFP) Request for Proposal (Exhibit A) Issued to the Contractor in the event of: an Owner-initiated change a design error or omission unforeseen conditions or other modification that alters the scope of Work. RFP is authorized by the OAR Contractor responds in 14 days
6 Owner-Initiated Change Owner Requested addition or deletion to the original Contract scope of Work Does not include unforeseen conditions or discrepancies in the Contract documents
7 Owner-Initiated Change Process Evaluate scope change impacts (cost/time) Submit Recommended Scope Change Request form (Exhibit B) Obtain final approval from Deputy Chief Facilities Executive AFTER approval, proceed with issuance of Change Order
8 Owner-Initiated Change Criteria Available project contingency Changes exceeding $5,000 require DCFE Signature Discretion of Regional Directors to recommend for approval
9 Change Order Proposal (COP) Process Contractor submits Change Order Proposal (Exhibit C) OAR reviews COP and prepares separate cost estimate of the work OAR and Contractor meet to review proposed adjustments to the Contract Amount and/or Time OAR documents (negotiations) changes in COP or cost estimate of the work
10 Change Order Proposal (COP) Contractor Documentation Pricing, breakdowns and costs to required to validate a proposed adjustment in the Contract Amount Detailed schedule analysis demonstrating the impact on the project critical path to substantiate requests for Contract Time extensions Revised or marked-up Drawings, Specifications, or sketches.
11 Change Order Proposal (COP) Cost of the Work Sum of all direct and indirect costs incurred by the Contractor in the performance of the Work
12 Change Order Proposal (COP) Cost of the Work Subcontractor Costs Contractor Costs Payroll costs (salaries and wages, fringe benefits, OT) Materials and Equipment Consultant Costs Supplemental Costs Contractor Fees
13 Change Order Proposal (COP) Cost of the Work Costs NOT included: Contractors costs for payroll staff considered general administration for the Contractor Contractor office costs other than site office Costs of bonds and insurance Costs due to negligence (defective work, material damage)
14 Change Order Proposal (COP) Cost of the Work Contractor Fee: 15% for labor and material supplied Subcontractor who actually performs the Work (one or more tiers): 15% to Subcontractor 5% to Contractor or next higher Subcontractor No fee payable on basis of costs for Consultant and Supplemental Fees
15 Credits: Change Order Proposal (COP) Cost of the Work Amount of actual decrease in cost PLUS Deduction in Contractor Fee of 5% of decreased cost Additions and Credits (combined) Contractor Fee calculated on basis of NET change
16 Record of Negotiation OAR documents (negotiations) changes in COP or cost estimate of the work Documents KEY discussion points in the Record of Negotiation Summary (Exhibit D) A member of Project Team attend all meetings with OAR and Contractor Agreement or partial agreement Issue Construction Directive to advance progress of critical work
17 Justification for Contract Modification Justification for Contract Modification (Exhibit I) Tool for OAR to document and justify contract modifications Details the Reason for the Change Tells the story and provides more details that the summary level CO page Justifies time extensions
18 Change Order (CO) OAR prepares Change Order (Exhibit E) signatory page and supporting documentation Within 7 Days from agreement Obtains Required Signatures Submits CO package to Facilities Contracts, Change Order Processing Unit (11 th floor)
19 Change Order Document Preparation Change Order (Signatory) Form (Exhibit E) Primarily issue single-item COs Grouping Multiple Items (Exception) CO Individual Item Sheet CO Item Summary form Assignment of CO Number T501, T502 CO Item Codes Instructions for Preparation of CO Package (Exhibit F)
20 Change Order Item Codes 1 Unforeseen Conditions 2 Owner Initiated Change 3 Not Used 4 Design Deficiency (E&O) 5 Outside Agency Required 6 Other A A/E Fee Recommended A/E Fee NOT Recommended
21 Change Order Order of Documents (TABS) 1. Change Order Checklist (Exhibit M3) 2. Change Order (signatory page) 3. Record of Negotiation 4. Owner Cost Estimate and COP analysis 5. Change Order Proposal and backup 6. Justification of Contract Modification 7. Request for Proposal 8. Construction Directive 9. Request for Clarification 10. Recommended Owner Scope Change Form (Approved)
22 Change Order Signatory Requirements (Exhibit H) Individual Aggregate OAR Dir Proj Supp Sr. PM Region Dir Dir of Const Deputy CFE All COs 0-$30K 0-2% $30K - $50K $50K - $75K $75K - $100K Exceeds $100K 2% - 3% 3% - 4% 4% - 5% > 5%
23 Change Order Processing Number of copies DSA Projects: (3) copies of wet signature CO form and supporting documents + (1) copy Non-DSA Projects: (2) copies of wet signature CO form and supporting documents Attach transmittal (OAR Name, Phone Number, work location) Verify Funding (Budget Modification Form) Submit to Change Order Processing Unit
24 Change Order Approval Facilities Contracts prepares (weekly) Change Order Memo Chief Facilities Executive signs* and approves Change Order Memo CO signature page stamped Approved with date of CFE signature on CO Memo Change Order is billable! Change Order Memo forwarded to Board for ratification of action *Delegated Board Authority
25 Change Order Document Distribution OAR Contracts (COPU) DSA (1) Original (1) Original (1) Original FCIU (1) Copy CO Signature page + Accounts Payable Regional Directors Change Order Memo (1) Copy CO Signature page + Change Order Memo (1) Copy of Change Order Memo + copies of all CO Signature pages
26 Change Order Document Distribution Facilities Construction Contracts sends letter to Contractor OAR distributes as follows: Contractor Inspector of Record (IOR) Architect Other Project Staff (Cost Analysts..) (1) Original (1) Copy (1) Copy (x) Copies as required
27 Change Order DSA Requirements Changes or alterations of plans and specifications previously approved by DSA, require approval prior to the commencement of the change Work
28 Change Order DSA Submittals A/E submits Preliminary Change Orders (PCO) to DSA upon notification by the OAR of the decisions to process a change PCO includes: Reason for Change Scope of Work Supplementary Drawings reference in scope Signature of Architect/Engineer A/E forwards DSA approved PCOs to OAR All PCOs must be followed up with submittal of LAUSD Approved Change Order.
29 Change Order DSA Review and Approval DSA returns all reviewed Change Orders to Facilities Contracts for distribution Rejected COs are forwarded to the OAR for action (follow-up by A/E) OAR sends corrected documents to Facilities Contracts for re-submittal to DSA. Approved Change Orders are sent to OAR OAR must distribute copies to Contractor, IOR and Architect/Engineer
30 Change Order Tracking (Expedition) OARs must log and status all change issues into Expedition within 2 days of occurrence Includes RFC, RFP, COP, CO critical dates and required information Cost Analyst update Expedition Logs with CO approved Dates Reference for a listing of Expedition training courses offered.
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