A change order increases the contract value by $75,000 and extends the completion date by 15 days. The original contract was $1,200,000 with a 120-day duration. What is the new contract value and duration?
Correct Answer
C) $1,275,000 and 135 days
The change order adds $75,000 to the original contract value ($1,200,000 + $75,000 = $1,275,000) and extends the duration by 15 days (120 + 15 = 135 days). Both adjustments are implemented as specified in the change order.
Why This Is the Correct Answer
Option A correctly applies both components of the change order. The contract value increases by the specified $75,000 ($1,200,000 + $75,000 = $1,275,000), and the duration extends by the specified 15 days (120 + 15 = 135 days). Change orders modify both financial and schedule aspects when both are specified, requiring contractors to implement all authorized adjustments to the original contract terms.
Why the Other Options Are Wrong
Option A: $1,275,000 and 120 days
While this option correctly applies the 15-day extension (135 days), it incorrectly calculates the contract value as $1,287,500. This appears to add an unauthorized amount beyond the specified $75,000 increase. The correct new value should be exactly $1,200,000 + $75,000 = $1,275,000.
Option B: $1,200,000 and 135 days
This option correctly applies the 15-day time extension (135 days) but fails to increase the contract value. The amount remains at $1,200,000 instead of adding the $75,000 increase. Change orders typically affect both financial and schedule components when both modifications are authorized.
Option D: $1,287,500 and 135 days
This option correctly calculates the new contract value at $1,275,000 but fails to apply the time extension. The duration remains at 120 days instead of adding the 15-day extension specified in the change order. Change orders that include schedule modifications must be fully implemented, affecting both cost and time.
Memory Technique
Remember 'Change orders CHANGE both' - when a change order specifies both cost and time modifications, both must be applied to get the complete new contract terms.
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