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Change orders

A change order is a document that specifies and justifies a change to a construction contract. Typically, a change order alters the time of completion, change in quantities, and/or the total price.

Sections NR 162.09(7)(c)1. and NR 166.12(7)(c)1. of the Wisconsin Administrative Code, allow the funding recipient to submit each change order and all associated backup documentation to the DNR construction management engineer (CME) within 90 days of execution of the change order, or, for change orders executed 90 days or more prior to submittal of the Clean Water Fund Program (CWFP) or Safe Drinking Water Loan Program (SDWLP) application, within 30 days of the date on which DNR receives the application.

State statutes require that the department periodically inspect Environmental Loan projects to determine compliance with the approved plans and specifications as well as other program requirements. Determining compliance involves the review and approval of change orders to any contracts for a project. A change order is eligible for funding only if approved by the DNR CME.

In situations where the proposed change(s) would substantially alter the capacity or operation of a facility, further review by technical review staff will be required. This may involve re-approval of the original plans and specifications. The municipality is strongly encouraged to discuss such potential changes in the project with the department's regional basin/watershed engineer as early as possible to allow adequate time for comment.

Municipality's role

Municipalities, as recipients of financial assistance from the CWFP or SDWLP, are responsible for the negotiation of change orders. During negotiations, the municipality must secure a fair and reasonable price for the required work. When the municipality prepares a change order for department review, it should:

Identify the change order

Include the municipality's name, project name and number, contract name and number, change order date and number and all other appropriate contract information.

Justify the change

Provide sufficient documentation to demonstrate that the municipality made a reasonable analysis of the change.

Submit cost and pricing of the change

Include invoices or quotations from the prime contractor and all subcontractors. Depending on the value of the change, a review of the cost should be conducted. The greater the cost, the more detailed the review should be. Some changes will require an independent estimate. Many will require the engineer to conclude that based upon experience the cost is appropriate.

Contractors overhead and mark-up

The overhead and mark-up will be limited up to 15% for the contractor actually performing the work and up to 5% for each tier of contractor above the original subcontractor who performed the work.

Obtain signatures of all parties to the contract

Obtain signatures of all parties to the contract

Submit the change order to DNR for approval

Mail the printed change order along with supporting documentation to the assigned DNR CME within 90 days of execution of the change order. In some instances, scanned documents (less than 25 pages) may be accepted in lieu of printed submittals.

The DNR CME will determine eligibility based on criteria specified in administrative codes, best management practices, ECJC Standard General Conditions of the Construction Contract and the project construction contract documents themselves. Read DNR CME interpretation of EJCDC standard general conditions for change order eligibility.

Contact information
For information on this topic, contact:
DNR Construction Management Engineers (CMEs)

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