Webmaster World Forum http://www.webmasterworld.com

Page is a not externally linkable
- WebmasterWorld
-- Professional Webmaster Business Issues
---- The Mighty (Neglected) Change Order

iamlost - 10:49 pm on Nov 14, 2004 (gmt 0)

I received a sticky from a fellow member requesting details for a "Change Order" form. (some nice comments too - thank you!) Hope this post helps.

Note: I am not a lawyer and this not legal advice. Please seek competent local legal advice before any use of the following.

My definition: A Change Order - (CO) is a written document signed by authorised persons, directing a contractor to make a change under the Changes clause of a valid contract.

Basically a CO is a description of an addition/change/deletion to a contract's scope of work and the addition/deletion/no change to the contracts quoted price.

So ... there must be a valid contract (a verbal contract can still be valid - well written and signed is much much better) and the contract must include a clause allowing for change. This clause is often omitted or poorly written, which can be a costly mistake.

My contract Changes clause includes at least the following:

Any and all changes must be documented by a CO.
The form(s) to be used are stipulated and included as an appendix to the contract.
A CO can be initiated by either party (client or contractor). Note: Some contractors/clients use a separate specific form to Request a Change. I generally do not.
That the contractor (me!) is the sole determinator of the work/time/cost requirements of the proposed changes.
A CO must detail the changes to the work, the time, and the cost.
That a CO must be signed as accepted by an authorised authority of each party involved (at least the client and contractor) to be in effect.
That there is no requirement to sign and accept a CO just because one party requests - the contract remains the contract.
The names, positions, companies, and addresses of all authorised signators to a CO.
The actual authority of each signer. (some companies only allow certain people to sign certain levels of change/cost)
The option for the contractor (me!) to claim that the change is enough to require an entire separate quote and contract - that it is materially outside of and therefore additional and separate to the current contract.
That without the signed consent of all/both parties there is no change.
That without the signed consent of all/both parties no work on a proposed change will be done.

I recommend that you prepare (ahead of time) a proper CO form. Mine includes at least the following:

A number sequence i.e. 0001.
The effective date.
The contractors name and address.
The clients name and address.
The contract name/number/etc. to which the CO applies.
The clause(s) of the contract to which the CO applies.
A description of each change. - (I prefer 1-CO == 1-change as it keeps things very simple but it can increase the paper with some clients)
A note (I use checkboxes on the form) to whether the "change" is additional work, decreased work, or no change to work. - (poor but simple example: deciding to change the font style after the design stage but prior to actual css coding is a change that adds no work/time/cost contraint to the contract)
A note to whether the "change" is additional time, decreased time, or no change to time.
A note to whether the "change" is additional cost, decreased cost, or no change to cost.
A description of the revised project milestones (if required).
The cost amount of each "change".
The total cost of change (if multiple changes per CO).
The revised total project cost.
The revised payment schedule.
The signature line with name, position, company of the client's authorised signer.
The signature line with name, position, company of the contractor's authorised signer.
The signature lines with name, position, company of the witnesses to each authorised signer.
Dates for each signature.
Various legal references put in by my law-type-person to comply with whatever.

I hope this is helpful. Far too many people are very talented in their technical expertise but very ignorant of business best practices.

Be a company - not an individual - if you are contracting work.
Have a Business Plan - update it at least yearly.
Have a lawyer and an accountant that you can communicate with - and do so.
Learn to write Proposals.
Learn to write contracts - and change orders.
Learn ... learn ... learn ...

[edited by: stuntdubl at 11:18 pm (utc) on Nov. 14, 2004]
[edit reason] generalized member [/edit]

Thread source:: http://www.webmasterworld.com/webmaster_business_issues/1619.htm
Brought to you by WebmasterWorld: http://www.webmasterworld.com