Change Order Dispute

[ahartin1]

I have a GC disputing basically all of my change orders, stating they are too high. I use Accubid Pro Change Order. I have been in the trade 42 years and doing change orders over 30 years. I use the data base for labor and very seldom adjust the labor rates it provides. The material pricing is all priced thru the data base with the exception of a few items. Any items that are quoted such as gear and fixtures, goes under quoted items. I use the OH&P that is allowed by the contract. The conditions on site is basically a completed building which will result in higher labor due to conditions. They do not see it this way. I am open for suggestions. This seems to be headed to legal issues if this continues, which is not a good thing.

 

[ron]

Since you haven't done the work yet, there shouldn't be a problem.
Show them your breakdown and if there is no pencil sharpening available, then it is what it is.

 

[macmikeman]

My suggestion: Don't perform any requested work before CO's accepted , and hopefully paid for. Just refuse. Some change orders come unrequested though such as in situations where other trades have messed up the installed electrical work before the job completes. On those types you are at the mercy of your GC usually. Good luck to you.

 

[cdslotz]

I have a GC disputing basically all of my change orders, stating they are too high. I use Accubid Pro Change Order. I have been in the trade 42 years and doing change orders over 30 years. I use the data base for labor and very seldom adjust the labor rates it provides. The material pricing is all priced thru the data base with the exception of a few items. Any items that are quoted such as gear and fixtures, goes under quoted items. I use the OH&P that is allowed by the contract. The conditions on site is basically a completed building which will result in higher labor due to conditions. They do not see it this way. I am open for suggestions. This seems to be headed to legal issues if this continues, which is not a good thing.

Has this been on one job? How many CO's are you behind?

 

[ahartin1]

Job is ongoing and several changes had been done already and several are pending. GC is getting 2 of his on Electrical subs to price my BOM and compare their pricing to mine, which to me is a direct conflict of interest.

 

[ramsy]

I have a GC disputing basically all of my change orders, stating they are too high. I use Accubid Pro Change Order. I have been in the trade 42 years and doing change orders over 30 years.

Doubt you'll find anyone with more than 30yrs experience, but do you care to eleborate the site conditions that increased your labor?

 

[petersonra]

Job is ongoing and several changes had been done already and several are pending. GC is getting 2 of his on Electrical subs to price my BOM and compare their pricing to mine, which to me is a direct conflict of interest.

What is wrong with checking your pricing?

As long as you can document where the numbers came from and this method was agreed to in the contract, he can check all he wants to.

This is why there needs to be a provision in the contract to deal with change orders.

What does the contract say about how change orders get priced?

 

[__dan]

The tip I got a long time ago was to get a copy of Civitello. Which I did. I had an old hardcover first edition, which I loaned out and never saw again.

The problem sounds like more of an issue with the GC. He could be just denying everything and running a war of attrition to wear the other guy out. If he really knows what he's doing I would be afraid of something buried in his contract that he's used before.

Civitello has a very readable writing style and a sympathetic predisposition. Changes are a natural part of the job, since not everything is going to be known or specced in advance. Combine that with an adversarial approach and the danger is very real. Civitello has insight into it that I could never dream of or guess at.

Amazon.com

 

[cdslotz]

Job is ongoing and several changes had been done already and several are pending. GC is getting 2 of his on Electrical subs to price my BOM and compare their pricing to mine, which to me is a direct conflict of interest.

Man that's pretty low brow....what's even lower is asking other EC's to spend their resources to price check you. It's not like they don't know what they are doing. If they do this on CO's, they do it on the base bid. In fact, they probably shopped your price to them when you bid. You must have been pretty low

 

[Dennis Alwon]

So he asks other electricians to price it knowing that they wont get the job. The ec prices it very low so the builder will call on him next time and makes you look bad.

I assume you bid against these guys already... This builder is one I would avoid but stand firm. Many companies bid jobs low just so they can make it up on change orders.

I had a boss in NY who bid jobs, at the IBM plant in Kingston, so low that he would actually lose money if there weren't change orders. With IBM you can bet there would be a ton of changes.

 

[Fiddling Fiddler]

I have a GC disputing basically all of my change orders, stating they are too high. I use Accubid Pro Change Order. I have been in the trade 42 years and doing change orders over 30 years. I use the data base for labor and very seldom adjust the labor rates it provides. The material pricing is all priced thru the data base with the exception of a few items. Any items that are quoted such as gear and fixtures, goes under quoted items. I use the OH&P that is allowed by the contract. The conditions on site is basically a completed building which will result in higher labor due to conditions. They do not see it this way. I am open for suggestions. This seems to be headed to legal issues if this continues, which is not a good thing.

I would recommend you look over your contract carefully, and read the specification manual for the project, if there is one. I have often found there is language that will not allow any change orders, or they will limit change orders to cost of material plus a percentage of the cost of materials. Also you may have to deal with liquidated damages if the project is not completed by a specific date.

Trying to submit a change order for extra labor cost is very difficult to do on any job.

 

[cdslotz]

I would recommend you look over your contract carefully, and read the specification manual for the project, if there is one. I have often found there is language that will not allow any change orders, or they will limit change orders to cost of material plus a percentage of the cost of materials. Also you may have to deal with liquidated damages if the project is not completed by a specific date.

Trying to submit a change order for extra labor cost is very difficult to do on any job.

That's probably the case. If you have never worked or bid to a particular GC or owner, you can bet that their contract is very one-sided. They can reject your CO and force you to continue while CO's are in dispute. You can't bill for them until dispute is resolved. This happened to me years ago on a large airport project. I had probably $100K in disputed CO's they wouldn't allow me to bill. My attorney had me bill for them anyway because if you don't, your lien rights expire after 30 days. We also filed liens every month. It finally infuriated them so much they came to the table and settled.
Good GC's these days have a boilerplate contract that is renewed yearly. It had all of the language regarding payment, CO's, insurance, etc. When they award you a job, the contract they send only covers special conditions related to that particular job

 

[Strathead]

My first hope would be that the other subs will have your back. As a PM an estimator with many years under my belt, I wouldn't deny your change order costs unless they were grossly over the top, because what comes around goes around. They should realize that. I would insist on doing all future change orders on time and material. Making sure to negotiate, up front the labor rate for you to process the changes.

 

[petersonra]

My first hope would be that the other subs will have your back. As a PM an estimator with many years under my belt, I wouldn't deny your change order costs unless they were grossly over the top, because what comes around goes around. They should realize that. I would insist on doing all future change orders on time and material. Making sure to negotiate, up front the labor rate for you to process the changes.

Likely the other subs will stab him in the back.

I have seen a fair number of change orders over the years. Usually they amount to a list of parts and labor with no indication of why the charges are outside the scope of the P.O. that was issued, or sometimes even what it was for.

I don't do much in the way of having to deal with the financial end of dealing with contractors anymore, but I sometimes get end users asking about the extra money they want. Sometimes it is stuff that was clearly in the original scope, other times it is not even clear what work was actually done. often there is no indication when the work was done either, or who did it.

But, as often as not, this is a problem created by both sides of the contract. if there is no clear understanding of how change orders are to be handled, it is almost always a big mess.

The thing most people hate is when the CO's get held until the end of the job and nothing is said about them until then and the guy footing the bill gets a bunch of change orders and no one knows what they are for or how they happened.

At the very least, before proceeding with changes, talk to the guy, then send the guy an email telling him based on his verbal instructions you are proceeding with the changes, and detailing those changes. It is not a perfect solution but it is a lot better than a bunch of expensive surprises.

I have to write change orders for stuff we do as well. It always works better if the guy footing the bill knows what is going on before the bill shows up.