Welcome to WebmasterWorld Guest from 54.234.38.8

Forum Moderators: LifeinAsia & httpwebwitch

Message Too Old, No Replies

The Mighty (Neglected) Change Order

The Best Practices Method of Changing a Contract

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

Senior Member from CA 

WebmasterWorld Senior Member 10+ Year Member

joined:Nov 25, 2003
posts:889
votes: 56


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]

9:37 pm on Jan 20, 2005 (gmt 0)

Administrator from US 

WebmasterWorld Administrator brett_tabke is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:Sept 21, 1999
posts:38047
votes: 11


awesome food for thought.
10:42 pm on Jan 20, 2005 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Mar 12, 2002
posts:1123
votes: 0


Alleluia!

I was working on something like this just an hour ago; you made is much easier for me Big Guy! thanks!

11:23 pm on Jan 20, 2005 (gmt 0)

Moderator from US 

WebmasterWorld Administrator robert_charlton is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:Nov 11, 2000
posts:11309
votes: 163


iamlost - Great post... thanks.

This is the kind of information that makes me glad WebmasterWorld is here, and prompted me to renew my Supporters subscription. It doesn't have to be in the private forum to be invaluable.

11:47 pm on Jan 20, 2005 (gmt 0)

Full Member

10+ Year Member

joined:Mar 7, 2004
posts:285
votes: 0


This is the kind of information that makes me glad WebmasterWorld is here

My exact thoughts - second time in two days (the Xenu recommendation being the other) - thanks iamlost for a great post.
4:57 am on Jan 21, 2005 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Apr 19, 2003
posts:1747
votes: 0


It never ceases to amaze me that just as I'm looking for something, sometimes DESPERATELY looking for it!, it will get posted in these fora.

iamlost, I repeat, you NEED to change your nick - how about IAMFOUND? You are ANYTHING but "lost"....

2:52 pm on Jan 21, 2005 (gmt 0)

Administrator

WebmasterWorld Administrator rogerd is a WebmasterWorld Top Contributor of All Time 10+ Year Member

joined:Aug 2, 2000
posts:9685
votes: 0


Great post - I can speak to the value of change control due to painful experience. Not long ago, we did a software development project for a reputable client. As our programmer was getting into the project, he suggested using a different database than originally specified; the client agreed. We completed the development phase, installed a demo, and trained the client's staff, incorporating some of their suggestions for improvement. About this time, a new senior boss took over IT at the client.

We sent the client a bill for the work, and ultimately were told they wouldn't pay. Our software didn't meet the specification, and they hired another company (buddy of new boss?) to complete the job. The client guy who approved our change developed a convenient case of amnesia, and denied approving any changes in the spec.

We ended up eating the entire project cost. For a variety of reasons, we decided not to sue the client. The overriding factor, though, was that we had no proof at all that the client approved the change.

That's a costly lesson in why formal change control is necessary.

Scope creep is another big factor. As you are going forward in a project, it's easy for the client to say, "Hey, can you do this, too?" When he gets the bill with the additional work added, amnesia strikes again. "I'm sure I never approved any cost beyond what was quoted... " I've got a contested bill right now due to that kind of thing - and the client is an attorney, of all things.

Change orders are your friend! Don't neglect them!

6:43 pm on Jan 23, 2005 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Feb 4, 2002
posts:1314
votes: 0


When he gets the bill with the additional work added, amnesia strikes again

There was a time when no IBM employee who walked among customers was without a little pad of potentially billable forms.

At the first hint that you were asking for something that might be extra to the contract, they'd pop a hand into a pocket and tear off a nice blank form.

They'd full it out with the details, and you'd sign and agree that you might be charged for the work being discussed,

It only said potentially billable so the charge might get waived or overruled by their superior. But it certainly put a sudden edge on whatever was being discussed.

8:17 pm on Jan 23, 2005 (gmt 0)

Senior Member

WebmasterWorld Senior Member tedster is a WebmasterWorld Top Contributor of All Time 10+ Year Member

joined:May 26, 2000
posts:37301
votes: 0


We've split off a new thread, to keep this one on topic:

When a Change Order (CO) won't work [webmasterworld.com] - what to do with a clent who just won't commit

 

Join The Conversation

Moderators and Top Contributors

Hot Threads This Week

Featured Threads

Free SEO Tools

Hire Expert Members