Common use of Lump Sum Change Order Proposals Clause in Contracts

Lump Sum Change Order Proposals. The Contractor will submit a properly itemized Lump Sum Change Order Proposal covering the additional work and/or the work to be deleted. This proposal will be itemized for the various components of work and segregated by labor, material, and equipment in a detailed format satisfactory to Owner. The Owner will require itemized change orders on all change order proposals from the Contractor, subcontractors, and sub-subcontractors regardless of tier. Details to be submitted will include detailed line item estimates showing detailed materials quantity take-offs, material prices by item and related labor hour pricing information and extensions (by line item or by drawing as applicable.) 1.1. Labor: Estimated labor costs to be included for self-performed work shall be based on the actual cost per hour paid by the Contractor for those workers or crews of workers who the contractor reasonably anticipates will perform the change order work. Estimated labor hours shall include hours only for those workmen and working foremen directly involved in performing the change order work. Supervision above the level of working foremen (such as general foremen, non-working foremen, superintendent, project manager, etc.) is considered to be included in the Markup Percentages as outlined in paragraph §7.1.4 of A201-2017. No separate allowances for warranty or safety expenses will be allowed as a direct cost of a change order. Costs attributed to warranty expenses and safety expense will be considered to be covered by the Markup Percentages as outlined in §7.1.4 of A201-2017. 1.2. Labor Burden: Labor burden allowable in change orders shall be defined as employer's net actual cost of payroll taxes (FICA, Medicare, SUTA, FUTA), net actual cost for employer's cost of union benefits (or other usual and customary fringe benefits if the employees are not union employees), and net actual cost to employer for worker's compensation insurance taking into consideration adjustments for experience modifiers, premium discounts, dividends, rebates, expense constants, assigned risk pool costs, net cost reductions due to policies with deductibles for self-insured losses, assigned risk rebates, etc. Contractor shall reduce payroll tax percentages to properly reflect the effective cost reduction due to the estimated impact of the annual maximum wages subject to payroll taxes. (An estimated percentage for labor burden may be used for pricing change orders. However, the percentages used for labor burden to price change orders may be examined during the project or at the conclusion of the project and an adjustment to the approved change orders will be processed if it is determined that the actual labor burden percentage should have been more or less than the estimated percentage used.) 1.2.1. Contractor agrees to provide and require all Subcontractors and sub-subcontractors to provide a breakdown of allowable labor and labor burden costs to be used in pricing change order proposals. This information will be used to evaluate the potential cost of labor and labor burden related to change order work. This information is not intended to establish fixed billing rates or change order pricing labor rates, but instead to represent an accurate estimate of the Contractor's actual labor and labor burden cost components. The accuracy of any such labor cost components used to price change orders will be subject to audit before or after the change orders are approved. Even approved change order amounts may be adjusted later to correct the impact of inaccurate labor cost components if the labor cost components are determined to be inaccurate. 1.3. Non-Reimbursable Labor Burden: Employee Stock Ownership Plan (ESOP) and/or Phantom Stock employee benefit fringe benefit costs are specifically considered non-reimbursable labor burden and any such employee benefit costs are considered covered by the change order markups allowed in §7.1.4 of A201-2017.