A couple recently came to me upset that they were forced to accept a change order on their roof replacement project. The value of the change order was 50% more than their initial quote.
The contractor presented them with the change order only after their existing roof tiles had been stripped off the roof. He told them that the change order was for extra unknown work required by the local building code. He said that he could not install the new roof without first replacing the existing plywood decking. A local fire ordinance required fire rated plywood that was installed prior to 1992 be replaced with new fire rated plywood. The house was built prior to 1992 and the code requirements did apply.
The couple argued with the contractor which caused the contractor to call his men off the roof and stop the work.
The couple stood their in front of their home with their roof exposed and a pile of old roof tiles on the front lawn. The contractor produced his contract which excluded replacement of the decking and another document that cited the code regulation.
For anyone caught in this situation, this can be gut wrenching. You have no choice. The contractor could charge anything he wants and you would be obliged to pay. The alternative would be to go back out and find someone else, but you would have to deal with an exposed roof and maybe even have to cart away the debris the first guy leaves behind. Basically, there is no choice but to accept the change order and move on.
So what went wrong and how could this have been avoided?
First let's see what the couple did right.
This couple did solicit multiple bids, so they were not relying on a single proposal. They did solicit quotes from local contractors familiar with local regulations. In this case the couple also had unit pricing for new plywood, so the contractor had to honor that rate. One would say they did go about this the right way. They claimed that all of the solicited contractor's excluded replacing the plywood decking. They all stated that they could not know if the plywood needed to be replaced without taking up the tiles.
There are a number of subtle changes that this couple could have made which would have resulted in better results.
1. They failed to request the proposal on the same bidform. When they solicited proposals they did not present the contractors with their own bid form. This gave the contractors freedom to present their quotes in whichever format they chose. In turn this made the homeowner's work of comparing the quotes more difficult. Before you solicit a quote always create a bidform and require that the contractor presents their price on your form. Ask for as much detail as possible. I will post an article on how to build a bidform in the near future.
2. They failed to ask for a fixed price. All of the contractor indicated that there was a chance that the plywood would have to be replaced. In hindsight, it seems obvious that they all were aware of the local ordinance and simply were not forthright with the owner. Anytime you have a potential for a change order, the way to deal with this is to ask for a fixed price (this is called an add alternate price), in this case the couple had a unit price. Fixed prices are better than unit prices because a fixed price is more predictable. Make sure your bidform includes a line item for add alternates, but make sure you describe the scope of the add alternate in as much detail as possible.
3. They failed to invest in preliminary studies. It may seem unreasonable to spend money on an architect for a simple roof replacement, but for a few hundred dollars, an architect could have informed the couple of the local ordinance and could have inspected the plywood from inside the attic to determine if it needed to be replaced. In this instance the Architect's cost would have been less than 5% of the total cost of this work (inclusive of the change order). The Architect could have also advised the couple on how to breakdown pricing on their bidform and helped draft the description for the add alternate.
These simple subtle changes would have saved this couple the gut wrenching drama they experienced. I also think that they might have paid less overall (including the architect's fee). Soliciting prices from contractors is more than picking up the phone and asking for a quote. Even the simplest remodel or repair work deserves some level of investigation and preparation.
Tell me your stories. Have you experienced similar circumstances? Do you think these simple changes would have helped you?
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