About Setting Up a Change Order
You can set up change orders for existing jobs (in JC Change Orders) to identify additions, deletions, or modifications to the original scope of work on the job.
Change order amounts posted here may affect current contract amounts and/or current phase estimates; they do not affect the Original contract amount or Original phase estimate amounts.
There are three levels to a Job Cost change order:
Header – Use this level to tie the change order to a job and its contract, specify the number of days by which the change order changes the completion date, and indicate whether the change order is internal (affecting the contractor’s internal budget) or external (affecting the owner’s schedule of values).
Change Order Items – This level is used to set up change order items, indicating the contract items to which they are related, the number of days by which the item changes the completion date, and the changes to units and billable dollars.
Phase/Cost Type Detail – This level is used to set up changes to your estimated costs related to this change order. Estimated changes to units, hours, and dollars will update your current estimate.
When adding change order items, you must specify the contract item to which the change order item is related. The contract item can be either a part of the original contract, or one you add for billing the change order. If you specify a contract item that does not already exist for the contract, you are immediately taken to the JC Contract Items form so that you can add the contract item.
The Phase Detail tab allows you enter change order detail; that is, the phases to which the change order applies. This includes the phase, cost type, month, UM, estimated hours and units, unit cost, and estimated cost. As with contract items, you can use existing phases or create new ones. Since you are adding estimated costs rather than actual costs, this program works somewhat like the Original Job Estimates program, in that it overrides the normal rules for locked jobs and allows you to create new phases even if the job's phases are locked. The new phases will be cross-referenced to the contract item for the change order item.
While you have extreme flexibility in how you use phases and contract items, as a practical matter, you should follow guidelines similar to these:
If the owner is not requiring you to bill the change order separately, simply set up the change order with existing items and phases.
If the owner wants to be billed separately, set up a new contract item for the change order. Then decide whether it is practical to collect your costs separately. If so, create new phases (such as by using the non-validated portion of your phase code--usually the sub-sub-phase). If separate costing is not practical, then use existing phases and try to break out the change order amount at billing time.
For very large change orders, you may find it useful to create a new sub-job that is linked to the same contract. In this scenario, you need to set up all new contract items and phases for the change order.