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.Read more
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.