Section 1 Who on earth issues a change order??

[Tianyi Jiang]

Hey, 

Who can tell me who on earth will issue a change order?

Hinze's book said owner issue a formal change order, 

A sample question from CLARB has one question" when the landscape architect is a sub-consultant, change orders are issued by_____ , the correct answer is "the prime consultant"

Another question asks " which of the following signature are needed to complete a change order?" the correct answer is "the contractor and the owner" no consultant. 

............................................... Who can tell me what is the truth?

Also, is the prime consultant an architect? an engineer? a landscape? If in the question, it shows "consultant", how should I understand it?

Thank you so much!

[designe...@gmail.com]

to my understanding and exp, it should be the client.

[B]

As stated it is the client. The reason for this is in the definition of the change order itself. In order for it to actually be a change order (not just a minor change or field adjustment) the change MUST have an effect on the price and/or time frame of the contract. As such, the client needs to be the one to make this change since it affects the contract they have with the Contractor.

[Lhellrei]

These are two different questions. The first one is asking who issues change orders relative to a specific situation (LA as sub-consultant) and the other is asking about completing change orders. 

For these questions and majority of the exam, you have to first figure out what the question is asking you. Be able to differentiate between similar terms on the same topic and really understand the construction document process, step by step and in detail. 

In this case, 'issuing' and 'completing'  change orders are different tasks. 

For the first question, the prime consultant typically prepares change orders, since the LA is the sub-consultant, they wouldn't prepare it.

Keep in mind, the consultant is really just acting on the owners behalf, so while they 'prepare' the change orders, their signature is not technically needed to 'complete' the change order. This may depend on the type of contract that is agreed upon for the project. 

[Anthony Giacovelli]

How the process works:

Think of the Prime as first hired by the Client.  This person is directly contracted to the Client and a Prime can be anyone: Civil, Architect, LA, Interior Designer...the Prime manages all other Subs not directly hired to the Client.

A change order is REALIZED when the Client wants to make a change. This can be a change to the design, not directed by the Contractors.  If the change order only affects a subcontractor/subconsultant, the Sub must submit the change order (CO) to the Prime, who them issues the CO to the Client.  For more clarification, the Prime pays the subcontractors and only the Prime is to ISSUE a CO to the Client because they directly represent the Client, not the Subs. 

Who COMPLETES the CO?

The Prime must sign off on the Subs CO. If a Prime does not agree with the CO, there will be negotiations most likely.  Once the Prime signs off, the CO is given to the Client who also must sign off on the CO because that means the Client agrees to pay for the additional charges for the changes.  This is why the answer is both the Prime (Contractor) and Client.

Hope that helps!

[CDO]

i took section 1 on wednesday and this exact subject matter is something i got hung up on as well, both during my studying and again during the section 1 exam, especially since i've been doing in-field observations / field reports, construction administration, issuing ASI's, and responding to RFI's for over a decade at this point. in my practice test materials i found this subject mentioned in anywhere from 1 to 5 questions total for each practice exam i was able to dig up - and since LARE section 1 has just 85 scored questions those 1-5 points are really critical! i can't remember exactly but i want to say this change order discrepancy came up at least twice and maybe three times on my Section 1 exam this week (August 2019). 

in my 13 years of professional experience (btw, in Portland, OR - of which 10 years have been at the PM + construction admin level and 8 years as Senior Associate with inherent CA role at the soup-to-nuts project inception to project completion level, at two award-winning and highly acclaimed firms, doing projects with the best of the best architects, developers and top tier general contractors, with project construction costs ranging from 1 to 100+ million each) it has always - always - been the GC that "issues" a change order, as a means to "get paid" for changes to the contract documents for ASI's or RFI responses etc. that have an impact to unit costs, labor costs, schedule etc. 

at no point have i as a project manager and senior associate in my 13 years ever - ever - "issued" a change order. a "change order request" is ALWAYS authored and issued by the GC. 

whether it's the LA as prime, the Architect as prime or the Owner/Developer as prime - my experience has always been a change order is issued by the GC in response to something - and it's a combination of the Prime + Owner reviewing the change order, sometimes with input from subconsultant, as to the legitimacy or overestimation of a change order, ultimately with the Prime Consultant being the responsible party for "approving" the change order request from the GC but only on paper under direct supervision from the owner/client. to reiterate - i have never seen any prime consultant, sub constultant, owner, developer or client "issue" a change order in my 13 years of working with some of the best of the best.  

after looking at 3 or 4 definitions of the words "issued" and "issues" in construction and legal terms just now, i think it's the word itself that is the hangup here.  

to issue something means to give or announce something, to supply or distribute something, or to come/go/flow out from. that doesn't imply a request or an approval, it's just an exchange. 

that said a change order could in theory, by definition, be issued by pretty much anyone holding a piece of the pie in the contract documents, whether that be the GC, the Landscape Architect (as either sub or prime consultant), the Architect (as either sub or prime consultant) or the Owner/Developer (either in the owner/developer/client role, or the owner/prime role). In any of these mentioned scenarios, my 13 year experience is a testament that it is ALWAYS in the GC's court to assess, critically analyze and conclude as to whether a field order, RFI response, submittal response, ASI issuance or any other orders/directives from "the top down" have an impact to the GC's budget/fee/schedule/labor demand and in return they are on the hook to "issue" a change order per the contract protocol for review and approval. maybe this is specific to oregon, or portland oregon, but i find that insanely hard to believe. 

to clear up this discrepancy (this is just one of many questionable wordings i have grumbled about during my LARE experience btw) the question should really be specifying who is issuing the "change order request" and who is issuing the "change order approval". 

does anyone disagree with what i have stated here? 

i can't believe how many questions i've seen during my LARE testing experience that are similar to this - missing one simple word that would clarify so much for the testee. i can't imagine being someone fresh out of school responding to this question, with multiple sources stating conflicting information like the OP mentioned above. 

i have in my gut seen answer choices that i know the test writers are going for but that i have so many "devil's advocate" or relevant and valid alternative scenarios based on my experience as to why there are actually, for example, 5 listed answer options that are applicable when the multiple response says "choose the 3 that apply" 

with that said, it's always been my experience that the GC issues the change order request. 

and it's always been the prime consultant who formally issues the change order approval or rejection after consulting/reviewing with owner and any subconsultants associated with the change order in question. 

 

[Jason Rubek]

For whatever it's worth, the previous firm I worked for issued change orders to the owner/developer for any additional services required of us during the design process that were not specifically outlined in our contract with them.

Your guess is as good as mine as to how that's different than an add service. Then again, I don't have 13 years of experience...

[JD Smith]

It may help to read the specific wording in various AIA sample agreements. I'm providing links to help find the referenced documents. 

For instance, B101-2017 (http://content.aia.org/sites/default/files/2017-04/B101_2017%20sample.pdf) para 3.6.5.1 states:

"The Architect may order minor changes in the Work that are consistent with the intent of the Contract Documents and do not involve an adjustment in the Contract Sum or an extension of the Contract Time. Subject to Section 4.2, the Architect shall prepare Change Orders and Construction Change Directives for the Owner's approval and execution in accordance with the Contract Documents."

A201-2018, General Conditions of the Contract for Construction, Article 7, Changes in the Work (http://content.aia.org/sites/default/files/2017-04/A201_2017%20sample%20%28002%29.pdf)

7.1.2 "A Change Order shall be based upon agreement among the Owner, Contractor, and Architect. A Construction Change Directive requires agreement by the Owner and Architect and may or may not be agreed to by the Contractor. An order for a minor change in the Work may be issued by the Architect alone...."

7.2.1 "A Change Order is a written instrument prepared by the Architect and signed by the Owner, Contractor, and Architect stating their agreement upon all of the following:

.1 The change in the Work;

.2. The amount of the adjustment, if any, in the Contract Sum; and

.3 The extend of the adjustment, if any, in the Contract Time."

See G701-2017 (https://www.aiacontracts.org/contract-documents/155036-change-order) for a blank change order form.

[Peter Salamon]

The answer we learned in school was “Client/Owner”. I only have 5 years exp, but this does seem to be the case...think of it in the most broad terms of the CO, the owner either comes up with the change or needs to approve something that another party found necessary

[Brad Howell]

Per the LAREprep practice exam A , one explanation to a question about field orders reads as follows:

"Both a field order and a change order are documents issued by the LA that directs the contractor to alter some portion of the design as described in the construction drawings. However, a field order is issued when the modification will have no cost or time implications for the project or contractor. Field orders and change orders can originate from request made by the contractor, LA or owner, but all must be issued by the LA and approved by the owner." 

I am sitting for sec. 1 tomorrow morning and still am not sure who issues change orders. I too have been in the biz for a while now (+/- 10 years) and have seen them issued by various people. I just need to know what the "LARE" want to see..... 

[Peter Salamon]

Thats what I don’t understand because you’re absolutely right in terms of the LA issues it, like the actual paperwork. If someone else thinks this is the answer I hope they chime in, but we learned that the outdoors of this question is to make sure you know the CO has to “go through” the owner

[Peter Salamon]

*purpose

[Beh A]

based on the definition of issue, Owner or LA issue CO... hope this helps. 

the action of supplying or distributing an item for use, sale, or official purposes.

"the issue of promissory notes by the bank"

synonyms:

issuing, issuance, publication, publishing;  circulation, distribution, supplying, supply, sending out, delivery;  appearance "the victory was celebrated with the issue of a special stamp"

• a number or set of items distributed at one time.

  "a share issue has been launched"
• each of a regular series of publications.

  "the December issue of the magazine"

  synonyms:

  edition, number, installment, copy;  printing, imprint, impression, version, publication "the latest issue of our magazine"

[Peter Salamon]

I mean is the question literally going to ask who issues it?  Usually theyre more complicated or multiple response,  like you would need to know the LA can issue a field order alone but not a change order, money is involved so it goes to the owner, etc

[Sage Winter]

Hinze pg 198, 

" since most change orders result in added costs to the owner, most contracts are fairly specific about the particular parties who area empowered to issue change orders . Often this power is removed from the architect, or the changes may have to be jointly issued by the owner and the architect." 

[Michael Odum]

It is my understanding that for purposes of the LARE, and based on Hinze text and AIA docs, that Change Orders are 'issued' by the owner.

In real life, during Construction Contract Administration, a landscape architect may act as an Agent of the owner and 'administer' change order paperwork, but contractually the change order is still issued by the owner.

The landscape architect didn't 'issue' the original contract between Owner and Contractor so why on earth would they issue a change to it? They wouldn't and they don't.

[Roxy]

This is my take on this having read all previous comments and reviewed many sources. please tell me if you agree, it is true that sources are conflicting in the meaning and misuse of word "issue" :

 

A Change Order is formal agreement  that amends the construction contract and is signed typically by all 3 parties (Owner, Contractor, Architect, see AIA Document G701- -or, sometimes, only by Owner and GC--See Hinze p.191, it depends on type of agreement ). 

A Change Order MUST have an effect on 1. work, 2.  the price negotiated in the contract and/or 3. time (duration) of the contract and the items of money and time changes are important  to differentiated this from a Field Change. Prices and time changes are specified  in the form of the Change Order used to sign.  

The REQUEST for a change order can come in theory from all three parties (Hinze says from the Owner, others says from the GC) but a change order is contractually issued and authorized by the Owner, even if in practice it may be administered and circulated or prepared by the architect (better words than "issued") for review and approval of the owner and contractor before they both sign. By signing the form, the contractor indicates agreement with the proposed changes and become entitled to any justifiable extra payments

 For Clarb at the beginning of the chat was said that  it seems that the signatures necessary are only are two- Owner  and GC , so they do not follow in the exam the assumption an AIA standard form is used. 

Also here is may interpretation of the difference between Change Order and Construction Change Directive: also here it is a bit nebulous:

In the event that time is of essence and to prevent delays due to the admin procedures involved in processing a change order, a Construction Change Directive expedites the process. It is a  written order prepared by the Architect and signed by the Owner and Architect, directing a change in the work PRIOR to an agreement if any, in the contract sum or contract time, or both. This is an authorization to the contractor to proceed with the work PRIOR to the issuance of a change order and it does not bear the contractor signature. It will be used in the absence of a total agreement on the terms of a Change Order but when the owner and GC agree with the change of Sum or Duration, such agreement shall be effective immediately and the Architect will prepare a Change Order to be signed.  Change Order may be issued for all or any part of a Construction Change Directive.

Please let me know what you think! I hope this works for CLARB.