Change Order
Policy Statement
Change Orders shall be minimized and used appropriately for unforeseen conditions that occur during construction. All Change Orders are subject to approval by DND. This approval will be based on justification of need and construction costs.

A Change Order (CO) is the legal process for handling changes that occur during construction and after the construction contract has been signed. A CO is required for changes in the scope of work, the contract sum, or the contract time.

All CO's are subject to this policy. DND will consider for approval only CO Types listed below. Approval must follow DND's Change Order Approval Process. The cost of all change orders is covered by the hard cost contingency required for all DND construction related projects and intended for unexpected expenses that occur during the construction of a policy only. The hard cost contingency is not a soft cost contingency.

Betterment and Value Engineering CO's (see definition below) will be considered at DND's discretion and when construction is 50% complete. At 100% completion of the project the unused hard cost contingency funds shall be distributed per DND's Hard & Soft Cost Contingency Policy.

Non Design-related Change Order: These change orders include unforeseen conditions, code-related issues, and building inspector changes.

Design-related Change Order: These change orders include unforeseen conditions that affect the appearance, layout, functionality, dimensions, and/or quality of the project.

Emergency Field Condition Change Orders: These change orders include any condition that causes an emergency situation where safety or other immediate losses may occur.

Donation/Contribution Change Orders: These change orders include changes resulting from the donation of materials or labor. All donations and contributions must be processed as a change order. Any savings realized will be added to the hard cost contingency.

Value Engineering and Betterment Change Orders: These change orders include those upgrades in equipment and materials deleted for budget reasons during final construction contract negotiations. A list of proposed items that were deleted during the value engineering process and the costs associated with each of those items must be identified by the Developer and submitted to DND no later than the time of the DND loan closing. This list with associated costs will be used to establish value engineering Change Orders. Priority may be given to those items that appear on the list over design-related Change Orders. Other items may be considered at the discretion of DND.

All Change Orders (CO) are subject to DND's Change Order Policy.

All CO's must follow the steps outlined below and receive the required authorization prior to any work being done. Any work performed on CO's prior to DND's authorization will be rejected. The Project Architect is responsible for the preparation and processing of Change Order documents. For any project where there is not a Project Architect, the Developer will assume this responsibility.

A cumulative up-to-date Change Order log should be included with each requisition and with each Change Order Request Approval Form.

Step 1: Contractor prepares a Change Order Request (COR) and submits the proposal to the DND Construction Specialist and the Project Architect. All change orders from start of construction through Certificate of Completion must be approved by the DND Construction Specialists prior to commencement of work.

Step 2: The DND Construction Specialists reviews the COR with the DND project staff and the Project Architect. After review, the DND Construction Specialist approves the COR by completing a DND Change Order Approval Form for submission to the DND Development Officer.

Condition A: For all COR's that exceed $7,500, the DND Construction Specialist must obtain sign-off's from the DND Development Officer and the DND Project Architect.

Condition B: If the CO's to date are greater than 50% of the hard cost contingency and the project is less than 50% complete, all CO's must be approved by the DND Development Officer and the DND Project Architect.

Condition C: For Emergency Change Orders where the contractor does not have time to obtain firm bids for the work, the contractor must provide in writing an abbreviated COR with a not-to-exceed sum and scope of work. DND Construction Specialist is authorized to approve this abbreviated COR per the attached approval form without further delay.

Step 3: The Project Architect prepares the Change Order Request package. The package should include the DND Change Order Request Approval Form, the AIA Standard Document G701 and associated back up. The DND Construction Specialist faxes copy of the completed Change Order Request package to the Development Officer who signs-off on the Change Order Approval Form then forwards the form to the DND Project Architect for approval. Once the DND Development Officer and the DND Project Architect have signed the Approval Form, the Development Officer will fax the approved form back to the Construction Specialist. Allow 3 working days minimum for approval of these change orders.

Step 4: After all signatures (Architect, Owner, Contractor) have been obtained, the CO is complete and work may proceed.

2-2 (11/02)

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