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. The 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.
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 contractors and individuals that whom the notice letter should be reviewed and approved. Those could be the commercial, legal and other departments as well as the project manager.
When the notice of constructive change for additional work is approved, the 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.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with more than 35-year service record providing project management and control services to over 100 projects with a02 total value of over the US $5 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment and Shopping Malls, Oil and Gas Plants and Refineries, and Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training, and business development.
Bassam is a frequent speaker on topics relating to Project Management, Strategic Project Management, and Project Management Personal Skills. Over the past 35 years, he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe, and South America. He has written more than 250 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP), and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.