109.12 Change Orders

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The primary purpose of a change order is to document a supplemental change to the contract. The official definition, as stated in Sec 101, is as follows:

Change Order - A written order from the engineer to the contractor, as authorized by the contract, directing changes in the work as made necessary or desirable by unforeseen conditions or events discovered or occurring during the progress of the work.

The second most primary purpose of the change order process is to ensure proper authority has been granted before proceeding with revisions in quantities or changes in scope of work, design concept, time or specifications. Changes in scope should be limited to the original intent, purpose and limits (length and width) of the job. In instances where proposed changes in scope go beyond these original job parameters, the change order shall be considered a major change order (Sequence 4). Significant scope changes require the State Construction and Materials Engineer to discuss the requested changes with the Asst. Chief Engineer prior to granting approval.

Change orders must have approval at all required levels before the work proceeds. Exceptions are granted for routine or minor changes, or emergency revisions for which verbal approval has been granted. In rare cases it may be necessary to proceed with emergency measures without prior approval. In such cases, verbal approval should be sought as soon as practicable. Indicate in the DWR remarks the name of the individual who provided verbal approval. For change orders that provide payment for additional work, all attempts should be made to complete the process promptly so that the contractor can be compensated at the end of the pay period in which the work was performed.

Environmental Change Orders - Any design changes that include disturbance of new areas on the project, or that include any other unplanned environmental impacts, should be reviewed by the Project Manager to determine if a request for environmental services is necessary prior to implementation.

Job Order Contract Change Orders. Job Order Contracts have unique contract terms that limit spending to a budgeted amount and often include pre-approved time extensions. Reference EPG 147.3.9 Change Order Approvals for additional guidance on administration of change orders for Job Order Contracts.

109.12.1 Change Order Preparation

Change orders are generated in AWP, and subsequently displayed in pdf format using the appropriate Cognos change order form. Quick Reference Guides are provided below to provide details. All completed change orders and supporting documentation shall be in electronic format and stored in eProjects. Change orders shall be transmitted in the original electronic format and shall not be scanned. Ink-signed paper copies or scans from a contractor shall not be accepted. A QRG (Digital Signature for Adobe Reader DC or Pro DC) is available to assist contractors with creation of their digital ID, and registration of that ID with MoDOT. The contractor shall also inform the RE in writing who they authorize to approve change orders on their behalf.

Supplemental Documents. Supplemental contract documents that are pertinent to the change order directive, such as new or revised plan sheets, new or revised Job Special Provisions, revised cross-sections, etc., shall be merged with the change order form to create a single file in pdf format and saved to eProjects prior to sending to the contractor.

Supporting Documentation. Any pertinent supporting documents (e.g. Contingent Item Price Check form, relevant emails, letter of agreed price, computation sheets, mock Force Account computations, etc.) that provide additional details of the change, or provide justification of a price for contingent work, should be saved in eProjects as Supporting Documentation. All supporting documents should be merged into a single pdf document for each change order (the Force Account spreadsheets will require conversion to pdf format). At a minimum, any change order that contains a new contingent item should have supporting documentation that justifies the agreed price. More information on how to justify an agreed price can be found in EPG 109.12.1.3 Contingent Items - Settlement for Cost. Time adjustment change orders require supporting documentation (e.g. weighted time-table computation, analysis of how an excusable delay impacted the critical path, negotiated settlement narrative, etc.), unless the change order reason is self-explanatory.

Final Change Order. If a clean-up change order is necessary after project completion to adjust the quantity of one or more pay items to the final accepted amount, this is designated as the “Final” change order. If no final change order is necessary due to all quantities being updated to final status by previous change order(s), the contractor should be informed that records indicate no further quantity adjustments are needed and the project will be closed out, as is, with current quantities as listed on the most recent pay estimate.

The following Quick Reference Guides provide detailed information on how to create a change order in AASHTOWARE Project and how to create the contractual pdf form:

Change Order Examples

109.12.1.1 Change Order Approval Level Criteria

This article provides the criteria to determine the required approval level of a change order. AWP assigns a sequence number to correspond with each approval level, as follows:

Contractor level (Sequence 1) – Approval applied in AWP by the Construction Project Office Assistant.
Non-major Change Orders:
RE level (Sequence 2)
District level (Sequence 3)
Major Change Orders:
Division level (Sequence 4)
Chief Engineer/ Chief Financial Officer level (Sequence 5)
FHWA Review (Sequence 6). If a project is designated for federal involvement for change orders on the PODI Matrix, and the change order is classified as district level or higher (i.e., Sequence 3, 4 or 5), review and approval by the Federal Highway Administration (Sequence 6) is required. RE level change orders do not require FHWA review.

The change order approval level criteria are listed below and available here in table form:

Change Order Approval Level Determination Chart

This chart is a graphic presentation of the criteria stated in EPG 109.12.1.1. All change orders require approval in AWP at Project Office Assistant role on behalf of the contractor (Sequence 1) AND the Resident Engineer role (Sequence 2). If the change order exceeds any of the criteria displayed in this chart, it would also need to be approved at the additional Sequence(s) shown. The chart values are absolute values. The criteria that requires the highest sequence approval always prevails over other criteria.

Non-major change orders (Change Order Sequence 2) approved by the Resident Engineer are:

1. Any no-cost (zero dollar) change orders (used when the direct substitution of a particular line item with a contingent item does not generate an additional cost or cost reduction).
2. Any change in a contract or contingency item less than $50,000.

Non-major change orders (Change Order Sequence 3) that require approval from the district office, and by FHWA on projects designated for federal involvement on change orders on the PODI Matrix, are:

1. Any change in a contract item or contingency item from $50,000 to $100,000.
2. Any new contingency item from $50,000 to $100,000.

Major change orders (Change Order Sequence 4) that require approval from the division office, and by FHWA on projects designated for federal involvement on change orders on the PODI Matrix, are:

1. Any change in a contract or contingency item greater than $100,000.
2. Any new contingency item greater than $100,000.
3. Any specification change.
4. Any revision in a contract unit price.
5. Any change in a “Major Item” greater than 25% from the original contract amount for that line item (in dollars). A Major Item is defined in Sec 101 as, “having an original value in excess of 10% of the original contract amount.”
6. Any change of the contract amount greater than 25% of the original contract bid amount (also in dollars).
7. Any change in design concept.
8. Any change order not approved by the contractor.
9. Any change order for adjustments due to differing site conditions or significant changes in the character of the work.
10. All value engineering change orders regardless of cost.
11. Any change order granting a time extension.

Chief Engineer/Chief Financial Officer change orders (Change Order Sequence 5) meeting any of the three following criteria must have the concurrent approval of the Chief Engineer and the Chief Financial Officer, and FHWA approval for projects designated for federal involvement on change orders on the PODI Matrix:

1. Additions greater than 50% if the original contract amount was $500,000 or less.
2. Additions greater than 25% if the original contract amount was greater than $500,000.
3. Additions greater than $1,000,000.

109.12.1.2 Description and Reason for Change

The author of the change order should provide sufficient narrative to explain both the reason the change is needed and a description that clearly states any necessary contractual language to define the terms. Enough detail should be included to explain the circumstances to someone who may be unfamiliar with the issue, such as a reviewer or auditor. For contingent items, check to ensure controlling specifications are available that adequately define the work, including the method of measurement and basis of payment. Add any terms not covered by specifications or other contract language. For significant quantity changes, explain exactly what caused the overrun or underrun (e.g. grade change, incorrect shrinkage factor, error in Summary of Quantities, roadway width differed from typical section, additional asphalt needed due to excessive rutting, etc.). Slight quantity variations can be explained as “Final measured quantity, within normal tolerance".

109.12.1.3 Contingent Items - Settlement for Cost

When a MoDOT standard bid item exists for contingent work, use the item number and description from the Bid Items Listing. Miscellaneous “99” numbers are available in this listing for items that require a unique description.

If payment is to be made by force account settlement, use item number 109.4000 FORCE ACCOUNT, enter $1.00 for the unit price and set the quantity equivalent to the estimated cost. The quantity will be adjusted after the work is complete to reflect the actual cost, as determined by the force account summary.

A “Settlement for Cost” statement should be included in the Description and Reason for Change field for all new contingent items. Changes to contract pay items, or previously established contingent items, do not require this statement since the contract prices govern. The “Settlement for Cost” statement, when required, should refer to the basis of settlement (i.e., agreed unit price, a fixed price listed in Standard Specifications, or Force Account). The settlement statement should also state the unit price. Here are some examples of “Settlement for Cost” statements:

  • “Settlement for cost of REPAIRING CONCRETE DECK (HALF-SOLING) shall be made at the agreed price of $69 per square foot.”
  • “Settlement for cost of CLASS 2 EXCAVATION IN ROCK shall be made at $170 per cubic yard, as specified in Sec 109.16 Fixed Cost Items.”
  • “Settlement for cost for FORCE ACCOUNT-MODIFY EXISTING DRAIN GRATES, as specified herein, shall be made per Sec 109.5 Force Account Computation.”

Justification of Agreed Price. Any contractor-proposed price for a contingent item shall be fully evaluated to ensure it is fair and reasonable before accepting it as the agreed price. Justification of the agreed price on any new contingent item shall be documented in eProjects as Supporting Documentation. Documentation is typically made on the Contingent Item Price Check form by comparing the agreed price to the Average Unit Bid Prices (BidTabs), or to a price for the same type of work on another area project. Sometimes documentation can be as simple as saving an email string that states the reason the price was deemed acceptable. For unique work for which no price comparison exists, or there are other factors that greatly affect the price, a detailed cost estimate (materials/equipment/labor) should be requested from the contractor that supports their proposal. If the RE concurs that the contractor’s breakdown of costs is reasonable, the price can be accepted. Another tool to arrive at an agreed price, especially for lump sum price quotes, is for project office staff to perform a mock Force Account analysis using anticipated materials, equipment and labor costs. If that total is reasonably close to the contractor’s proposal, the price can be accepted as an agreed price without invoking the force account process. If a price agreement cannot be reached, the RE should direct the contractor to proceed with the work under Force Account Computation per Sec 109.5.

All contingent work must be clearly defined (i.e., include a description of work, material requirements, construction requirements, method of measurement and basis of payment). References to the standard specifications may be used when available.

Settlement Clause (used only for settlement of a Claim or Controversy, as defined in Sec 101). When a change order involves a negotiated settlement and final resolution of a contentious issue, in order to clarify the settlement is all-inclusive for any associated claims for costs, the following language is recommended for insertion into the change order description:

"The amount being paid to <Construction Company> in this Change Order represents a negotiated settlement and, as such, reflects payment of all claims of <Construction Company> and/or any of its subcontractors and suppliers direct and indirect, including all impacts starting from the date of execution of the contract until the execution by both parties of the Change Order. However, nothing in this Change Order affects <Construction Company>'s right to file a claim based on an occurrence after the date of this Change Order."
Note: Delete the last sentence if the change order is being issued after all work on the project is complete.

109.12.2 Change Order Approval

Preview for Sequence 3, 4 or 5 Change Orders. All draft Major change orders shall be submitted to the to the Construction Liaison Engineer for initial review prior to submitting to the contractor. Likewise, all district level change orders shall be sent to the DCE prior to submitting to the contractor. This is only considered initial approval, change orders sent to the contractor should not contain any MoDOT approval signatures. MoDOT approval and signing shall occur after the contractor digitally signs the change order.

Following any required previews, the RE will submit the completed change order to the contractor as an attachment to an email. The contractor’s signature should be requested on all change orders. If the contractor refuses to sign a change order, their refusal should be documented and disclosed to any subsequent approvers (i.e., district or division level approvers). If the decision is made to execute the change order without the contractor’s signature, all other approval signatures will be applied, and the executed change order will be sent back to the contractor as a directive to proceed with the change in work. If the unsigned change order includes new contingent item work, and no contract price or fixed price exists, payment for that portion of the work will need to be designated force account. The RE should add an informational note to the contractor signature line documenting the contractor’s refusal to sign, stating the change order has been executed by the Commission, and stating the contractor has been directed to proceed with the change.

Contractor disclaimers (i.e., notes, special terms, or conditions to signing) that are added to the returned change order by the contractor should not be allowed. If the contractor requests to add terms to the agreement, and those terms are deemed acceptable to MoDOT, the RE should revise the change order and add the terms to the explanation/description field. Likewise, the RE should not type additional contract terms or disclaimers on the change order form (outside of the proper field). However, non-contractual informational notes/comments can be added at the RE’s discretion (see previous paragraph for an example).

Once the digitally signed change order is returned from the contractor, the RE shall upload it to eProjects, sign, and then approve in AWP. For change orders that require district level or higher approval, the RE will then send an email to the District Construction Engineer with a direct link to the change order, along with a link to any supporting documentation. If the change order requires division level approval, the RE should also copy the Construction Liaison Engineer. After approval has been completed at the district level, the DCE will forward the email on to the Construction Liaison Engineer if division level approval is required. The highest-level approver will reply to the RE confirming that the pdf is signed and the change order is approved in AWP. For PODI projects that are designated for change order review by FHWA, the highest-level approver will forward the email on to the appropriate FHWA Transportation Engineer and copy the RE. The FHWA Transportation Engineer will reply to all when approved.

109.12.3 Time Adjustment Change Orders

All time adjustment change orders, whether for overall contract time, individual project time, or specified milestones (e.g. road/bridge closure), are considered major change orders and shall be reviewed and approved by the division office. Initial review by the Construction Liaison Engineer shall be made prior to any agreements with the contractor and prior to submitting the Time Adjustment change order to the contractor. Time adjustments are granted for events deemed by the engineer as excusable delays that inhibit progress of a controlling item of work (i.e., critical path schedule). Sec 108.14.1 lists some of the common events that warrant consideration. EPG 108.7 Contract Time for Completion of the Work provides guidance for determining the appropriate amount of a time extension. The AWP CO 3 Change Order Time Extension provides guidance on how to generate the time change in AWP. Justification for the extension should be documented and saved in eProjects as Supporting Documentation unless the change order reason is self-explanatory.

All time extension change orders should include a description and reason and for granting of additional time, the amount of days, and any terms associated with the extension. The description should identify the controlling item of work that was affected by the delay, as confirmed by examining the critical path schedule. If the extension includes multiple causes of delay, each cause should be listed separately, along with the amount of time granted for each, excluding any overlap. Time adjustments are sometimes granted for reasons unrelated to an excusable delay. Time adjustments are sometimes granted as part of a negotiated settlement and may not directly correlate with the progress schedule. Regardless of the reason for the extension, a revised Progress Schedule should be requested following execution of the change order. An example Time Adjustment Change Order is available.

The following statement is recommended for inclusion in all time adjustment change orders to make clear that the additional time being granted includes all excusable delays up to the date of the change order:

“This revised Completion Date (or, “This addition of Calendar Days”), as specified, is full and final adjustment for all time and costs, loss or damage including, without limitation, delays, accelerations, or inefficiencies, resulting from the above causes, and is made without prejudice to the Commission.”

109.12.3.1 Excusable Delays for Unusual Events

Per Sec 108.14.1, the engineer may grant an excusable delay for unusual or extreme events. To qualify, the events must be highly unusual and not just somewhat out of the ordinary. For example, a wet construction season due to above average rainfall does not necessarily constitute “unusually severe weather”. In addition, the event must be outside of the contractor’s control and must have adversely affected the project's identified critical path schedule. Completed work damaged or destroyed by motorist or other outside parties may qualify as an excusable delay only if the remediated work adversely affects the project's critical path. When significant defects or failures in the contractor’s workmanship are discovered during the project and the remediation is extensive and results in significant time delays to the project's critical path, the State Construction and Materials Engineer may, at the State Construction and Materials Engineer's discretion, grant the contractor additional time to perform the remediation as part of a settlement agreement. The contractor shall submit in writing to the State Construction and Materials Engineer a justification request for the additional time. The justification must include the duration and timeframes to complete the remediation. In addition, an action plan that outlines the specific remediation shall be included with the justification. Only the time to perform remediation repairs will be considered for the additional time requests. The decision to grant additional time for these events are the sole discretion of the State Construction and Materials Engineer.

109.12.3.2 Description, Reason and Supporting Documentation

The Description/Reason narrative of the time adjustment change order, as well as the Supporting Documentation, should address four primary areas:

1. Describe the Contract Change - Begin by explicitly describing the change in contract terms. For example: “The number of Calendar Days for J4P2168, as stated in Section 2.1 of JSP B. CONTRACT LIQUIDAGED DAMAGES, is hereby increased from 130 days to 134 days.” Or, if the contract completion date is being extended, state: “The Contract Completion Date stated in Section 2.0 of JSP B. CONTRACT LIQUIDAGED DAMAGES, is hereby extended from Nov. 1, 2021 to Nov. 5, 2021.” If extensive changes are being made to the JSP, rewrite the JSP as desired, then merge it with the change order and state the following: “Delete JSP B. CONTRACT LIQUIDAGED DAMAGES and substitute with the attached version.”
2. Justification - Now explain the justification for the extension. For example: “The major operation, storm sewer pipe installation, was halted from March 15 thru March 18, both dates inclusive, to allow for the relocation of an unexpected water main owned by the City of Lee’s Summit, right of Sta 156+22. Per Sec 105.7.6.1, this delay is considered excusable but non-compensable.” If there are many details, provide those in the Supporting Documentation rather than the change order itself.
3. Full and Final Closure Statement - Insert our standard closure statement so that it is clear that this agreement is full and final. No additional cost adjustments will be made except for any terms that may have been included in the opening contract change statement. Insert the closure statement (cut/paste) exactly as it is written in EPG 109.12.3 Time Adjustment Change Orders. Just edit the part in parenthesis to match what type of time change you made (i.e., calendar days or date).
4. Supporting Documentation - Now provide Supporting Documentation, if necessary. This is an internal document to help reviewers and auditors understand the details. In the simple example above, everything was addressed in the change order itself, so no supporting documents would be needed. But, for example, had a weighted time table calculation been necessary, it would be shown in the Supporting Documentation. Or, perhaps a brief analysis of the critical path schedule is necessary to explain how the number of days granted was derived.
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