Written by Bassam Samman, PMP, PSP, EVP, GPM
A constructive change occurs when the project owner, by its actions, changes the contract without specifically adhering to the requirements of the “Changes” clause. A constructive change order has been defined as an oral or written act or omission by the project owner, or his authorized agent which is of such a nature that it has the same effect as a formal written change order under the Changes clause.
Constructive changes most often arise where there is a dispute regarding contract interpretation, defective plans and specifications, acceleration or suspension of work, interference or failure to cooperate with the contractor, misrepresentation or nondisclosure of superior knowledge or technical information, over inspection, or a delay in providing requested information crucial to the contractor’s ability to continue work.
Regardless of the reason for a constructive change, the contractor should adhere to the requirements in its contract’s changes clause for change notice submission time frames, support, and format requirements. To provide an example of a notice of constructive change for additional work, we have used the sample letter created by Richard J. Long P.E., Founder and CEO of Long International, Inc.
Using Project Management Information Systems (PMIS) like PMWeb, contractors can improve the process for issuing notices of constructive change for additional work. PMWeb form builder will be used to capture the fields needed to complete issuing the notice letter such as the problem details, reason and date of the problem and to whom the notice should be issued to.
The attachment tab will be used to attach and upload all documents as well as link PMWeb records that relate to the problem. Those could include pictures, letters, confirmation of verbal instructions, daily reports, and meeting minutes, among others.
The workflow tab will detail the different contractor’s individuals that the notice letter should be reviewed and approved by. Those could be shared with the commercial, legal and other departments as well as the project manager.
When the notice of constructive change for additional work is approved, PMWeb Word module will have the notice letter template predefined. The fields within the letter template will be automatically updated by the values captured in the form. The letter will be merged to MS Word so it can be printed, wet-signed, stamped and issued to the project owner or his authorized agent.