Change Orders

IMPORTANT:

- Do Not send a change order to a client without properly communicating to them first!

- Explain why we are giving them a change order.

- Ensure the client knows the Change Order is being issued BEFORE approving any Change Orders from Subcontractor.

General Conditions for Subcontractors

Per section 9 of Contract with Subcontractor, ELITE may order extra work or make changes by altering, adding to, or deducting from their SOW with the agreed upon price being adjusted accordingly.
The Subcontractor should not start any work outside their SOW until receiving a written Change Order signed by ELITE’s authorized signers, unless at their own expense.
No changes in the SOW shall extend the required completion schedule, unless specifically agreed to in the Change Order.
The Subcontractor must provide very detailed Change Order information in written or electronic form to the onsite Project Manager.
When Subcontractor submits their Change Order, it must include Material Cost, Labor Cost, Measurement in Linear Feet or Square Feet, along with pictures.
Change Order must be submitted with proper backing for all material costs and breakdown of labor costs. (Material quotes, lower tier invoices, etc.)
Project Manager should first verify that this is indeed a change to their original SOW and that it is not on the plans, in the specs, or in their contract.
Next, Project Manager will verify material costs presented are same as supplier quotes along with markup, and that labor costs presented are fair and justifiable.
Subcontractor must coordinate with the Project Manager
to obtain APPROVED or DENIED prior to performing any work.
Project Manager is authorized to Approve or Deny COs up to $15,000. Above $15,000 requires approval by President AFTER CO has been properly reviewed and vetted by Project Manager.
Each Subcontractor or supplier of any tier shall receive no more than 15% of the cost of any materials supplied or work properly performed by their own forces. (Or as defined in Owner contract documents.)
Each Subcontractor or supplier of any tier shall receive no more than 8% of the amount they properly incur for materials supplied or work performed by lower-tier suppliers or subcontractors. (Or as defined in Owner contract documents.)

Creating owner Change Order (OCO) in SAge

OCO is sent to client to sign

Sage Step by Step Training: Owner Change Order

Prior to starting a change order in Sage, verify that ALL Subcontractor requirements mentioned above have been met.
Once requirements have been met, log into Sage and go to Projects page.
Select the Project and then Client Contract Administration.
Next to COs, click the blue drop down arrow next to Actions. Select Add Manually.
Select the Prime Contract related to this CO.
Fill out the General Information, Company Information, and write a Relevant title as well as a very clear and well defined Scope of Work for the CO. (The Scope should be so detailed that someone who has no knowledge of the situation can read it and completely understand what is changing to original scope, IE the client.)
Under References, select the drawing, RFI, Spec, etc. relevant to this CO.
Under Schedule Impact, uncheck the box and type the number of days needing to be added to ENTIRE project schedule as a result of this CO, then click Next.
Upload all related files (Photos, PDFs, etc.) then click Finish.
Scroll down to CO Items and click the drop down arrow next to Add/Import Items. Select Add Manually.
Fill out Line Item Details including brief description, quantity, units (LS, LF, SF, etc.), unit price, cost code, etc.
Standard Unit Price will be the SubCost plus a 30% markup, unless otherwise agreed to in contract with client.
If contract does NOT state the markup percentage for Change Orders, leave the Cost Budgets at $0. (CoreCon shows the Costs to client when CO is sent through email)
If CO markup percentage is defined in Contract with Client, Fill out the Cost Budgets based on Subcontractor CO.
Click Save & New to add more line items, or Save & Close if finished.
Click drop down arrow in top right corner next to Reports and select CO Proposal.
Change the Export Option to PDF.
Verify all information related to CO is correct.
If CO amount is more than $15,000, Send this PDF along with all backup documentation to Dustin for review and approval.
Once approved, or if less than $15,000, Review one final time all the information entailed in CO you have created.
Click drop down arrow in top right corner next to Reports and select CO Proposal.
Change the Export Option to Email PDF.
Next to CC list click Import and add Dustin as recipient.
DO NOT check Grant Access box under Linked File Attachments.
If Contract with Client requires backup documentation for COs, Select Choose File and upload PDF copies of backup docs.
Once Approved by Client in writing, return to CO information and click the yellow pencil to revise. Change the CO Status to Approved and click Save & Close. THEN create SCO using instructions below.

Creating Sub Change Order (SCO) in SAge

sco is sent to subcontractor to sign

Sage Step by Step Training: Subcontractor Change Order

After CO is approved, SCO must be created and sent to Subcontractor for signature before they can invoice for their SCO.
Log into CoreCon and go to Projects page.
Select the Project and then Procurement.
Next to SCOs, click the blue drop down arrow next to Actions. Select Add Manually.
Select the Project, Prime Contract, CO # that you already created for this SCO (to link the SCO to the CO), and the Subcontract related to this SCO.
Fill out the General Information, Company Information, and use same title as used for CO and a very clear and well defined Scope of Work for the SCO. (The Scope should be identical to the Scope written in CO.)
Under References, select the drawing, RFI, Spec, etc. relevant to this CO.
Under Schedule Impact, uncheck the box and type the number of days needing to be added to ENTIRE project schedule as a result of this (S)CO.
Select the Job Cost Code and Tax Code if necessary.
Scroll down to SCO Line Items and fill out Line Item Details including brief description, quantity, units (LS, LF, SF, etc.), unit price, cost code, etc.
After inputting all the Line Items and verifying that the totals area correct based on change order sent by Subcontractor, click Save.
Scroll down to the SCO Line Items and verify the Total is correct, matching change order sent by Subcontractor.
Scroll down to the Linked Files section and click Add (or Drop) to add the PDF version of the change order sent over by the Subcontractor.
Scroll back up to the top of the page and click the drop down arrow next to Reports. Select SCO Details.
Change the Export Option to Save PDF to Linked Files. Click OK.
Scroll back down to the Linked Files section.
Click the drop down arrow next to Actions and select E-Sign.
Click blue Initiate Esign button on the right.
Under Signer 1, Select the Company/Contact that sent the change order. Select the name to the right of the person who will be signing the SCO.
The Name and Email should automatically fill out.
Under Signer 2, Select Elite Construction, then select your name (PM responsible for signing all SCOs).
If SCO is above $15,000, under Signer 3, Select Elite Construction, and Dustin Mayers (President) to be the third signer of the SCO. If below $15,000, click Remove next the Signer 3.
In the Email Subject, delete SCOs and type in Change Order (this helps the subcontractor know what the signature is for).
Click Send Document at bottom of page.
While the signatures are pending, it will show a Yellow Signature Box under Linked Files.
After all parties have signed, the Signature Box will turn Green.
Once the Signature Box is green, go to the top of the screen of the SCO and click the Yellow Pencil.
Under General SCO Information, change the Status from pending to Approved.
Click Save & Close.
Now the SCO will appear in the Subcontractor’s TeamLink for them to be able to invoice for it during their next billing period.