2.3 Construction Change Orders, RFIs & Claims

Construction Change Orders, RFIs & Claims

Modifications, design clarifications, unforeseen field conditions, and project delays occur routinely on construction projects. General Contractors must understand formal change order mechanics, Request for Information (RFI) procedures, constructive change doctrines, and claims resolution workflows under AIA A201 and Florida law.

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1. Mechanisms for Contract Modification

Standard AIA contracts establish three distinct mechanisms for modifying project scope, cost, and schedule during construction:

Modification Mechanisms Summary

Construction Change Directive (CCD) Pricing Methods

When a CCD is issued under AIA A201 § 7.3.3, if the contractor and owner cannot immediately agree on a price adjustment, the Architect determines the cost based on one of four methods:

1. Mutual acceptance of a lump sum properly itemized;
2. Unit prices stated in contract documents;
3. Cost to be determined in a manner agreed upon by parties plus a mutually acceptable fixed or percentage fee; OR
4. Actual cost of labor, equipment, materials, insurance, and taxes plus specified overhead and profit percentage (AIA A201 § 7.3.4).

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2. Request for Information (RFI) Lifecycle & Administration

A Request for Information (RFI) is a formal administrative process used by contractors to seek written clarification regarding ambiguities, omissions, or conflicts in contract drawings and specifications:

1. Identification: Contractor discovers drafting conflict (e.g., structural drawings show 12-inch column while architectural drawings show 10-inch column).
2. RFI Submission: Contractor submits formal RFI log entry detailing drawing numbers, grid lines, and specific clarification requested.
3. Architect Review & Response: Architect reviews and responds within contractually specified turnaround window (typically 7 to 14 calendar days).
4. Impact Assessment: If the response adds work or alters time, contractor MUST promptly issue a Change Order Request (COR) or Change Proposal Request (CPR) prior to performing the work.

Exam Warning: An RFI is NOT a change order. Performing extra work based solely on an RFI response without written cost/time authorization from the Owner risks forfeiture of compensation.

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3. Constructive Changes & Differing Site Conditions

Constructive Changes

A constructive change occurs when owner or architect conduct (such as defective specifications, improper rejection of conforming work, or informal verbal directives) effectively forces the contractor to perform extra work or accelerate performance without a formal, signed Change Order.

Differing Site Conditions (AIA A201 § 3.7.4)

When encountering unknown physical conditions at a site, contractors must provide written notice to the Owner and Architect within 14 days of initial observation before conditions are disturbed:

• Type I Differing Site Condition: Subsurface or latent physical conditions encountered at the site that differ materially from those indicated in the contract documents (e.g., soil borings show sand, but contractor encounters solid bedrock at 4 feet).
• Type II Differing Site Condition: Unknown physical conditions of an unusual nature that differ materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the contract (e.g., discovering buried toxic chemical drums on a suburban building pad).

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4. Delay Claims & Time Extensions

Project delays fall into three distinct legal categories, governing entitlement to extra time and extra money:

\text{Excusable + Non-Compensable} &\rightarrow \text{Time Extension ONLY (No Extra Money)} \\ \text{Excusable + Compensable} &\rightarrow \text{Time Extension + Extended General Conditions Money} \\ \text{Non-Excusable} &\rightarrow \text{No Time Extension + Liquidated Damages Assessed} \end{aligned}$$ | Delay Category | Cause / Responsibility | Contractor Relief Entitlement | |---|---|---| | **Non-Excusable Delay** | Contractor poor performance, subcontractor delays, equipment breakdowns, labor shortages. | **No time extension;** Owner may assess liquidated damages. | | **Excusable / Non-Compensable** | Force majeure, severe weather exceeding historical norms, acts of God, industry strikes. | **Time extension granted;** contractor receives NO delay money. | | **Excusable / Compensable** | Owner design changes, delayed site access, defective plans, architect slow submittal reviews. | **Time extension AND monetary compensation** for extended general conditions. | ### Florida 'No Damages for Delay' Clause Enforceability Florida courts strictly enforce contract provisions stating that time extensions are the contractor's *sole and exclusive remedy* for owner-caused delays ("No Damages for Delay" clauses). **Exceptions to Enforceability:** Under Florida law, a contractor can overcome a "No Damages for Delay" clause ONLY by proving: 1. Active interference or willful fraud by the owner or owner's agents; 2. Bad faith or concealment of site facts by the owner; OR 3. Delay so severe and prolonged as to constitute total abandonment of the contract by the owner. --- ## 5. Dispute Resolution Workflow under AIA A201 Article 15 When claims cannot be resolved through routine change order negotiations, AIA A201 establishes a strict multi-tiered dispute resolution sequence: ``` [Step 1: Written Notice of Claim] (Within 21 Days of Event) │ ▼ [Step 2: Initial Decision Maker (IDM)] (Architect Renders Decision) │ ▼ [Step 3: Mandatory Mediation] (Condition Precedent to Binding Resolution) │ ▼ [Step 4: Binding Dispute Resolution] (Arbitration or Litigation) ``` 1. **Notice of Claim (Section 15.1.3):** Written notice must be delivered within **21 days** after occurrence of the event giving rise to the claim or within 21 days after claimant first recognizes the condition. Failure to give 21 days' written notice waives the claim. 2. **Initial Decision Maker (IDM) (Section 15.2):** Claims must be referred to the IDM (usually the Architect) for initial review. The IDM has 10 business days to request additional data, approve, or reject the claim. 3. **Mandatory Mediation (Section 15.3):** Mediation administered by the American Arbitration Association (AAA) is a **mandatory condition precedent** to binding dispute resolution. 4. **Binding Dispute Resolution (Section 15.4):** If mediation fails, parties proceed to the binding method selected in the agreement (Arbitration or Court Litigation). --- ## Worked Scenario: Differing Site Conditions & Notice Waiver **Scenario:** A General Contractor performing excavation for a parking structure in Fort Myers encounters buried concrete foundation rubble from a demolished 1950s structure. The contract drawings show the area as clear dirt. The contractor immediately halts excavation in that zone, takes photographs, and sends formal written notice of a Type I Differing Site Condition to the Owner and Architect 6 calendar days after discovery. The Owner orders the GC to remove the rubble, but refuses a change order for the extra $35,000 cost, arguing the GC waived its claim because notice was not given within 48 hours. **Analysis:** 1. *Claim Validity:* The condition represents a textbook **Type I Differing Site Condition** because physical subsurface conditions differed materially from those indicated on contract drawings. 2. *Notice Timeliness:* Under AIA A201 § 3.7.4, the contractually mandated notice window for differing site conditions is **14 days** (not 48 hours). Delivering notice on day 6 satisfies all contract requirements. The GC is legally entitled to a Change Order adjusting the Contract Sum by $35,000 and extending the Contract Time for critical path delays.