Unit price contract change orders

Change orders (CO) can be documented for unit price contracts. However, specific steps must be taken to ensure that the unit price financial dashboard is accurate.

Job cost codes for unit price contracts

Keep the following points in mind: 

  • For every unit price item there should be a matching job cost code. Thus, if there are ten original unit price items referenced in the prime contract, then there would be ten matching job cost codes.
  • If a new unit price item is introduced through a change order, then a job cost code must be added to the project, and then referenced in the COs Proposed items section. This job cost code would not be referenced in the original prime contract.

  • Quantities and units in the Job cost codes table should reflect the revised values.

    Example: Job Cost Code Quantity = Prime Contract Unit Price Quantity + CO(s) Unit Price Quantity

Update quantities for original unit price items

If the CO affects Original unit price items, then the quantity in the Job cost code table must be updated to reflect the revised value.

  1. Go to the Projects overview page and select a project.
  2. On the Projects menu, under Client Contract Admin, select Job cost codes.
  3. Select a cost code that will be impacted by the change order.
  4. Change the quantity to match the quantity in the revised project estimate.
  5. Click Save and Close.
  6. Change any other original unit price items that are affected by the change order.

Create job cost codes for new unit price items

As mentioned, there must be a one-to-one relationship between job cost codes and unit price items whether they are referenced in the prime contract or a CO.

  1. Go to the Projects overview page and select a project.
  2. On the Projects menu, under Client Contract Admin, select Job cost codes.
  3. On the Actions menu, select Add manually.
  4. Enter the order number, cost code, description, quantity and units to represent the new unit price item. The quantity should match the estimated project/change order quantity.
  5. Select Save and Close.

Creating the change order

Follow these steps to add the change orders header information.

  1. Go to the Projects overview page and select a project.
  2. On the Projects menu, under Client Contract Admin, select COs.
  3. On the Actions menu, select Add manually.
  4. The order number and change order number are automatically generated based on the selected project and prime contract, but they can be modified.
  5. Select an option in the Initiated By field and enter a Subject.
  6. If the change order is approved, update the Status and Status Date fields.
  7. Enter the Contact and Address Type for both the client and prime contractor.
  8. Enter the Scope of work.
  9. Complete other optional fields as needed.
  10. Select Next.
  11. Add any linked files.
  12. Select Finish.

Importing items

There are two options for importing the items affected by the change order. You can import the original unit price items, or you can import new unit price items.

Import original unit price items

Original unit price items must be imported from the prime contracts unit price table so there is a cross reference link.

  1. Go to the Change order information screen.

  2. From the Add/Import items menu, select the import option for the type of item youre working with.

    For example, select Import equipment items.

  3. Select Unit Price Items from the drop-down. The original items documented in the prime contract are listed.
  4. Select only the items affected by the CO.
  5. Import the selected items and return to the Proposed Items details page. The description, unit of measure, unit price and job cost code will be imported. The quantity will initially be set to zero.

  6. Enter the additional quantity needed for the original items.

    Note: The Prime Contract Unit Price table has the original quantity.

  7. Important: The Unit Price Rate for original items should not be changed so there is no discrepancy between the Prime Contract and COs.
  8. Click the Save button below the grid to record any changes.

Importing new unit price items

  1. Click the Import button below the Proposed Items grid.
  2. Select Job Cost Codes from the drop-down.
  3. Import the cost codes that were created for the new unit price items.
  4. Close the pop-up window and return to the Proposed Items details page.
  5. Update the Quantity and Unit Price for each imported job cost code. The quantity and units should be equal to the estimated project quantity.
  6. Click the Save button below the grid to record any changes.

Update cost budgets for original and new unit price items

Changes can impact cost budgets for both original and new unit price items because there could be additional material, labor and equipment that is needed to complete this scope of work change.

  1. In the proposed items list, click the Edit button next to the item.
  2. In the pop-up form, navigate to the cost budgets section shown at the bottom.
  3. Enter the appropriate unit cost rates for material, labor, equipment, sub and other.
  4. Click the Save button.

Setting Labor and Equipment Hour Budget Revisions

If portions of the COs work scope will be self-performed, then revisions to labor and equipment hour budgets should be documented to accommodate for the extra time necessary to complete this scope of work. Timecard Dashboards will include approved CO hour budgets and be compared with actual Timecards.

  1. On the CO Details page, click Labor and Equipment Hour Impact By Job Cost Code to view the Job Cost Codes list.
  2. To add Job Cost Codes, click the Import button below the grid.
  3. In the import window, select the Job Cost Codes to be added.
  4. Click the Add button below the grid.
  5. Enter Labor and Equipment Hour Budgets (eg Run Time, Idle Time, and Down Time). The hours entered will be added to the original values set in the Prime Contract.
  6. Click the Save button.