Q: Am I responsible for a Change Order AFTER the project has been completed?
I had a fire suppression system (fire sprinklers) install at my business.
We had a signed contract describing the work done and the agreed amount. Just prior to the start of the project the city required them to change where they would connect to the city waterline. I was aware they would need to change some of their plans but at the time no one mentioned anything to me about any added cost.
AFTER the work was completed they emailed me a Change Order, increasing the original bid by almost 50%! They say the extra amount is for extra man hours digging the trench, and that the ground was harder than they anticipated.
I understand that they may have incurred some extra costs but I feel like 50% is ridiculous. I haven't signed the CO, since I JUST found out about it a week after project completion.
Am I obligated to pay the extra amount? Do I have leverage to negotiate a lower price?
A:
In order to give you a proper analysis on your options, it would be necessary to have an attorney review your particular contract. Each contract for building projects is different, but a good one should usually contain several clauses explaining liability for change orders, when/how to dispute them, a builder's obligations as it relates to zoning, or what happens to each party's obligations (your obligation to pay) when unforeseen circumstances arise.
The fact that the additional work was caused by their obligation to maintain compliance with city ordinances and that you were aware of the changes may not bode well for you. But again, in order to make a full determination, someone would need to take look at the contract and gain a better understanding of all the facts.
As a practical matter though, most business owners that care about remaining in business don't want unhappy customers or reviews. You could reach out to the general contractor and ask about initiating a dispute for the change order if you haven't already and explain that you feel blindsided by the price since it was not communicated to you at the time the need for changes was established. They may be willing to work with you out of goodwill. Might sound far fetched, but I have seen it happen.
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