Your client wants to add a swimming pool to their project after the contract is signed. The pool work will cost $35,000 and extend the project by 3 weeks. The contract has liquidated damages of $500 per day. How should this change order be priced?
Correct Answer
D) $35,000 plus time extension with no additional liquidated damage exposure
Owner-requested changes that extend the project timeline typically include time extensions that relieve the contractor of liquidated damages for that period. The contractor shouldn't bear delay costs for owner-initiated changes.
Why This Is the Correct Answer
When an owner requests a change order that extends the project timeline, the contractor is entitled to both the cost of the work and a time extension that relieves them from liquidated damages during the extended period. This is standard contract law - contractors shouldn't be penalized with delay damages for owner-initiated changes. The $35,000 covers the pool work cost, and the time extension protects against liquidated damage exposure for the additional 3 weeks.
Why the Other Options Are Wrong
Option A: $35,000 plus $10,500 for potential liquidated damages
This incorrectly assumes the contractor must pay liquidated damages for owner-requested changes. The $10,500 calculation (21 days × $500) represents potential damages the contractor would face, but owner-initiated changes typically include time extensions that relieve this exposure.
Option B: $45,500 total with no time extension
This approach denies the time extension that should accompany owner-requested scope changes. Without a time extension, the contractor remains exposed to liquidated damages for delays caused by the owner's additional work requirements.
Option C: $35,000 (pool cost only)
While the pool cost is correct, this option fails to address the critical time extension needed. The contractor requires protection from liquidated damages during the 3-week extension period caused by the owner's scope addition.
Memory Technique
Remember 'Owner Orders = Time Extension Protection' - when the owner adds scope, they also add time without penalty to the contractor.
More Contract Admin Questions
A project experiences a 30-day delay due to unusually severe weather. The contract includes a liquidated damages clause of $1,000 per day for delays. If the weather delay is excusable but not compensable, what liquidated damages apply?
A commercial project requires a total of 12 inspections. The building department charges $85 per inspection for the first 5 inspections, $65 for inspections 6-10, and $45 for any additional inspections. What is the total inspection fee?
What document must be posted at the job site before a Certificate of Occupancy can be issued for a commercial building?
A mixed-use development requires a variance for reduced setbacks. The property is located within 500 feet of a hospital. What additional consideration must be addressed?
A LEED project requires tracking of regional materials. Materials are considered regional if they are extracted, harvested, or recovered, as well as manufactured within what distance of the project site?
An indemnification clause in a construction contract typically requires the contractor to:
A property owner wants to convert a single-family home into a duplex in an area zoned for single-family residential use. The conversion meets all building codes but violates density requirements. What approval is needed?
As-built drawings are typically required to be submitted:
AIA Document A401 is primarily used for:
A general contractor is building a 12,000 square foot commercial warehouse. The building permit fee is calculated at $8.50 per $1,000 of construction value. If the project value is $2,400,000, what is the building permit fee?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Project Management
60 questions · 70% to pass