Change orders and extra work on public contracts

"While you're here, could you also do the back lot?" It sounds harmless. The custodian or site supervisor is friendly, the job is small, and you want to be helpful. Then the invoice comes back rejected because the extra was not authorised, and nobody remembers asking.

Extra work is one of the most common sources of friction on public contracts. Handled well, it is a source of profit and goodwill. Handled badly, it is free labour.

Why public contracts are strict about changes

Public buyers spend money under rules. Contracts are approved at a set value by people with specific spending authority. Staff on site usually cannot commit the buyer to new spending, however senior they seem. Federal contracts, for example, say that only the contracting authority can change the contract, and work done on someone else's say-so may not be paid.

The same idea runs through most BC municipal and institutional contracts. Read the contract's change clause to find out:

• Who can approve changes, by title.
• What form they take: change order, purchase order amendment, work order or contract amendment.
• How changes are priced: using contract unit rates, an agreed quote, or time and materials at set rates.
• Any limits: some contracts cap total changes as a percentage of the original value.

A simple change process

1. Pause before you start. If something is not in the scope, it is a change, even if it is small.
2. Confirm the request in writing, the same day. A short email: what was asked, by whom, and when.
3. Price it. Use the contract's rates where they apply. Otherwise give a written quote with labour, equipment, materials and markup. See the unit-rate trap.
4. Get written approval from someone with authority, in the form the contract requires. A purchase order number is often the clearest sign it is real.
5. Do the work and record it: dates, hours, photos. See the records that protect you.
6. Invoice it separately, with the approval reference, so it does not hold up your regular invoice.

Emergencies

Sometimes a change cannot wait: a burst pipe, a fallen tree across an entrance, a safety hazard. Most contracts allow emergency work with approval after the fact. Do what is needed to make it safe, tell the contract manager immediately, record everything, and get written approval as soon as possible. Do not use "emergency" for things that could have waited a day.

When the scope is unclear

Many disputes are not about new work but about what the original scope meant. Was the side path part of "all walkways"? Is high dusting in "general cleaning"?

• Raise it early, before doing the work, and in writing.
• Point to the documents: the tender, addenda and your bid.
• Propose a fair answer, such as doing it this time and clarifying it for the rest of the term.

Many of these disputes start during the bid. If the tender is vague, ask questions before closing. See asking questions and reading addenda.

Small favours

Not every small extra needs a change order. Being flexible is part of keeping a good client, and a ten-minute favour can earn more goodwill than it costs. The trick is to be deliberate: decide it is a favour, tell the buyer it is a no-charge extra, and note it in your log. That way it counts in your favour at renewal and does not quietly become part of the scope. Read keeping a contract at renewal.

If a change is refused or not paid

Talk to the contract manager first, with your records. If that fails, the contract usually sets out a dispute process. For federal contracts, the Office of the Procurement Ombud can review some disputes about contract terms and payment. On BC construction work, the Builders Lien Act and the new prompt payment rules may also matter. See BC's Construction Prompt Payment Act and getting paid on public contracts.