State Aid Change Order Form and guidance
By: Kyle Puent, Construction Specialist - Metro
Contract revisions are governed by Standard Specifications for Construction 1402. The Engineer reserves the right to make, in writing, at any time during the progress of the work, such changes in quantities and such alterations in the work as are necessary to satisfactorily complete the project or for reasons of the department’s interest. Revisions to the contract will not add work beyond the limitations imposed by law or beyond the termini of the proposed construction except as may be necessary to satisfactorily complete the project. Revisions to the contract neither invalidate the contract nor release the surety, and the Contractor agrees to perform the work as revised. Either party to the contract may assert that a contract revision has occurred.
A Change Order (CO) is a legal and binding document that modifies the original contract as executed and approved, or to document a contract revision that is permitted by contract, special provisions, or plan. Write and execute a CO for contract modifications and for extra work, or for specification deviations, price schedules and adjustments, or modifications provided for in the contract. Some of the common conditions CO’s are required for are, but not limited to are: Differing Site Conditions, Significant Changes to the Character of Work, Extra Work, Material Substitutions & Contract Time. State Aid for Local Transportation (SALT) has a CO form template to use. The SALT CO form (Word) format contains the required information necessary to properly document and execute these contract revisions. Use the most current version of the CO form from the SALT website. Contact your District State Aid Engineer (DSAE) with any questions pertaining to conditions in which a CO is required to be executed.
There are many circumstances where the department won’t initiate the CO. In these instances, the Contractor is required to notify the department as soon as a contract revision appears necessary. The Contractor shall not start or continue with an activity or contract item for which a contract revision may be necessary without authorization from the Engineer. During this time the Engineer will determine if a contract revision is merited. If the Engineer deems a contract change is merited, the Engineer and Contractor negotiate the work to be performed as well as the method of payment (contract unit price, negotiated price, force account) for the contract change.
On federally funded projects the department is required by Code of Federal Regulations (23 CFR 635.120) to get an independent cost estimate to verify new prices added to the contract. This can be done with the MnDOT Contract Changes & Estimating Unit, or by other methods. Contact your DSAE for requirements. Once the independent estimate is performed route the CO for final signatures. The final step in the CO process is to submit the CO to your local DSAE for funding participation approval and signature.
We have modified the SALT CO form (Word) to help produce higher quality CO’s. Below is a summary of the changes to the form.
- “Narrative” section includes a new outline format to use to help draft more complete change orders. This outline format contains three new subsections as follows:
- Issue – This section is to be used to describe the issue for which the CO is being generated. The issue section would also describe the justification for why the contractor is entitled to compensation. There is a dropdown list prepopulated with the most commonly incurred change conditions to select from. If none of the prepopulated conditions apply to your change condition, then select the “other” option to describe in detail what the issue is.
- Resolution – This section is to be used to describe what actions the Agency & Contractor will take on this contract change. This should clearly describe what the Agency & Contractor are responsible for completing as a result of this change order.
- Entitlement – This section is to be used to describe what compensation the Contractor is entitled to and what the compensation will be because of the change condition. E.g. force account, existing contract pay items, adding additional contract pay items.
The “Contract Time” impacts have been relocated to the “Entitlement” subsection of the narrative. This subsection is to be used to modify the contract time the Contractor is entitled to as compensation.
- “Estimate of Cost” table has minor formatting changes. No other significant changes.
- “Contract Time” table has been removed. The contract time item has been added to the end of the narrative section underneath the “Entitlement” subsection.
- “Signature” lines have been changed to a fillable table. This eliminates signature line underline issues. Also, adding the table function allows for adding additional signature boxes if needed for the local agencies e.g. City/County Administrator.
Here is an example of a completed CO with exception to final signatures.