CCA Construction Change Orders and Claims 1 — Questions and Answers
Question 1: A construction change order is a formal written agreement that modifies the original contract by adjusting:
- Only the project schedule
- Scope, price, and/or schedule as mutually agreed by owner and contractor (Correct answer)
- Only the contractor's profit margin
- The subcontractor's bonding requirements
Correct answer: Scope, price, and/or schedule as mutually agreed by owner and contractor
A change order is a bilateral modification to the construction contract that can adjust scope, contract price, and/or the contract completion date.
Question 2: Which red flag suggests that a contractor may be using change orders to recover costs that should have been included in the original bid?
- A small number of change orders for genuinely unforeseen conditions
- A high volume of change orders for items that were reasonably foreseeable at bid time (Correct answer)
- Owner-directed scope additions with supporting documentation
- Schedule extensions for severe weather events
Correct answer: A high volume of change orders for items that were reasonably foreseeable at bid time
Numerous change orders for work that was foreseeable from the bid documents suggests the contractor under-bid intentionally and is recovering costs through change orders.
Question 3: A 'constructive change' in construction contracting occurs when:
- The owner issues a formal written change order
- Owner actions or inactions effectively require the contractor to perform extra work without a formal change order (Correct answer)
- The contractor voluntarily performs additional work
- A subcontractor modifies the scope unilaterally
Correct answer: Owner actions or inactions effectively require the contractor to perform extra work without a formal change order
A constructive change arises from owner conduct—such as defective plans, differing site conditions, or interference—that forces additional work without explicit written authorization.
Question 4: Which document provides the most reliable contemporaneous evidence to support a contractor's claim for additional compensation due to a differing site condition?
- Contractor's post-project narrative
- Daily field reports, photographs, and third-party geotechnical data recorded at the time of discovery (Correct answer)
- Contractor's financial statements
- Owner's meeting minutes from project kickoff
Correct answer: Daily field reports, photographs, and third-party geotechnical data recorded at the time of discovery
Contemporaneous daily reports, site photographs, and independent geotechnical data recorded when the condition was encountered provide the strongest, most credible claim evidence.
Question 5: Under most standard construction contracts, a contractor who proceeds with disputed work without a reservation of rights typically:
- Preserves full claim rights
- Waives the right to claim additional compensation for that work (Correct answer)
- Accelerates payment
- Increases their contract price automatically
Correct answer: Waives the right to claim additional compensation for that work
Performing disputed work without a written reservation of rights is commonly interpreted as acceptance of the existing contract price, waiving additional compensation claims.
Question 6: A construction auditor reviewing change order documentation should verify that each change order includes:
- Only the contractor's signature
- Detailed scope description, cost breakdown, schedule impact, and authorized signatures from both parties (Correct answer)
- The subcontractor's bonding information
- The contractor's overhead allocation method
Correct answer: Detailed scope description, cost breakdown, schedule impact, and authorized signatures from both parties
Complete change order documentation must describe the changed scope, itemize costs, identify schedule impacts, and carry signatures from authorized representatives of both parties.
CCA Construction Change Orders and Claims 1
A construction change order is a formal written agreement that modifies the original contract by adjusting: