road construction lawyers
by OCL
Significant Changes in the Character of Work
In most states’ standard specifications, a project Owner/Engineer retains the right to make alterations to the contract quantities and the work to be performed under the contract with no change in compensation to the Contractor.
However, if this work amounts to a “significant change” in the character or quantity of the work, then an adjustment to the contract needs to be agreed upon, in writing, between the Owner and the Contractor before the work is performed.
While standards vary from state to state, a typical definition of what constitutes a “significant change” includes two types of changes. The first part of a significant change clause might include language discussing whether the change in work differs “materially in kind or nature” from what was originally contemplated. The second part of a significant change clause might include language about whether a “major contract item” is increased (e.g. in excess of 125%) or decreased (e.g. below 75%) by a specific percentage of the original contract quantity.
Most state specifications reserve the right to make these contract adjustments to the states themselves, but it is important for the Contractor to be in (written) contact with the Owners as early as possible in this process, that way the owner can provide feedback on what might be an equitable outcome for both parties. In any event, a Contractor should not provide changed work until a written agreement and the basis for the change is agreed upon. Throughout this process, early contact with an attorney can be helpful to ensure the proper procedures are followed and so that equitable compensation for a Contractor’s changed work may be provided for.
by OCL
What is a Contract Item, or Pay Item, in regards to Road Construction Contracts?
“Contract items,” or “Pay Items,” have a specific meaning in road construction contracts that can be important when preparing a bid, reviewing individual pieces of an overall project, or negotiating changes to a certain contract.
Notably, individual states have somewhat differing definitions of what they classify as Contract Items, but most likely, a contract item is defined as a specific unit of work for which a specific price is provided in the contract documents. Prices for Contract Items can be provided on a per unit basis, or on a lump sum basis for the totality of a Contract Item.
Moreover, some states’ standard specifications delineate a difference between major contract items and minor contract items. A major contract item is typically defined as an item that makes up more than five percent of the entire contract amount. A minor contract is an item which has a value less than five percent of the contract amount. To be sure, the project’s specifications should be reviewed to determine the actual percentage or amount required, typically this can be found in the “Definitions” section of the specifications.
by OCL
Change Orders in Road Construction Projects
In road construction projects, change orders provide legal permission to allow Contractors to perform work outside the scope of the original contract documents. Change orders can be used in a variety of different ways, but are often used to address unforeseen circumstances that arise in the course of a project.
Technical, legal definitions of a Change Order can vary based on each state’s specific standard specifications for road construction, but each of these definitions typically includes the following elements:
Some state definitions for change orders state that any additional work added can be assumed to be performed at the original contract prices. Other definitions don’t include this “default” language, and require the change order include terms regarding pricing and payment.
