120R-

21

DEMONSTRATINGENTI
TLEMENT
FORCONTRACTCHANGEORDERS
ORCLAIMS–ASAPPLI EDIN
ENGI
NEERING,
PROCUREMENT,AND
CONSTRUCTION

Rev
.Apr
il9,2022
 AACE® International Recommended Practice No. 120R-21

DEMONSTRATING ENTITLEMENT FOR CONTRACT CHANGE

ORDERS OR CLAIMS – AS APPLIED IN ENGINEERING,
PROCUREMENT, AND CONSTRUCTION
TCM Framework: 10.3 – Change Management

Rev. April 9, 2022

Note: As AACE International Recommended Practices evolve over time, please refer to web.aacei.org for the latest
revisions.

Any terms found in AACE Recommended Practice 10S-90, Cost Engineering Terminology, supersede terms defined in
other AACE work products, including but not limited to, other recommended practices, the Total Cost Management
Framework, and Skills & Knowledge of Cost Engineering.

Contributors:
Disclaimer: The content provided by the contributors to this recommended practice is their own and does not necessarily
reflect that of their employers, unless otherwise stated.

Dr. Stephen P. Warhoe, PE CCP CFCC FAACE Hon. Life Richard J. Long, PE
(Primary Contributor) Donald F. McDonald, Jr. PE CCP PSP FAACE Hon. Life
Saad Ishac Dr. Seyyed Amin Terouhid, PE DRMP PSP

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This document is copyrighted by AACE International and may not be reproduced without permission. Organizations may obtain permission
to reproduce a limited number of copies by entering into a license agreement. For information please contact [email protected]
AACE® International Recommended Practice No. 120R-21
DEMONSTRATING ENTITLEMENT FOR CONTRACT
CHANGE ORDERS OR CLAIMS – AS APPLIED IN
ENGINEERING, PROCUREMENT, AND CONSTRUCTION
TCM Framework: 10.3 – Change Management

April 9, 2022

TABLE OF CONTENTS

Table of Contents ..........................................................................................................................................................1

1. Introduction ...............................................................................................................................................................2
2. Recommended Practice .............................................................................................................................................4
2.1. Elements Necessary to Demonstrate Entitlement Basis for a Change Order Request or Claim ........................4
2.1.1. Causal Event Occurrence ............................................................................................................................5
2.1.2. Adherence to Contract Change Notice Requirements ................................................................................6
2.1.3. Contractual Entitlement to Request a Contract Change or Make a Claim..................................................7
2.1.4. Demonstration of Causation .......................................................................................................................7
2.1.5. Prudent Effort to Mitigate any Impacts ......................................................................................................8
2.1.6. Assignment of Responsibility ......................................................................................................................8
2.1.7. Quantification of Impacts ...........................................................................................................................9
2.2. The Elements are Inter-related ........................................................................................................................10
2.3. Document Retention and Organization ...........................................................................................................10
2.4. Change Order Request or Claim Submission ....................................................................................................10
References ...................................................................................................................................................................11
Contributors ................................................................................................................................................................12

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1. INTRODUCTION

This recommended practice (RP) addresses the necessary elements to determine technical entitlement for a change
order request (COR) or claim as applied in engineering, procurement, and construction. While any definitions
provided by contract documents would supersede this RP, in the absence of clarity in the contract, this RP defines
key elements of the change request process. These elements of a COR or claim apply to any typical design,
procurement, and construction contracting strategy or delivery method.

The purpose of this RP is to provide guidelines concerning the critical elements to demonstrate technical entitlement
in support of a change order request or claim on a capital construction project, that most practitioners would
consider to be a good practice, that can be relied on, and that they would recommend be considered for use where
applicable. Additionally, entitlement in the terms of the RP is how a contractor administers the EPC contract
(including the relevant purchase orders and subcontracts) entered into using the guidance of their legal advisor. This
RP is focused on the technical administration of the contractual terms and conditions. Therefore, all usage of the
term entitlement, throughout this RP, refers to technical entitlement and not to legal entitlement.

This recommended practice is relevant to stakeholders on a capital construction project; this includes owner,
contractor, subcontractor, construction manager, or other stakeholders. Although this recommended practice is
written in the context of a contract between an owner and contractor, it is equally applicable to any parties
contracted to perform a project including owners and architect-engineers (A/E), as well as general contractors and
their subcontractors. This RP can also be used as an internal change management guideline within an organization’s
management procedures. In the context of this recommended practice, the contractor is assumed to be the
claimant. Of course, this is not always the case. The owner/employer, A/E, and a subcontractor can also be claimants
as well.

It is important for all parties to a contract to understand the contract provisions, as well as laws, regulations, and
standards that govern the contract. It is also highly recommended that an attorney be consulted to review the
change management process of a contract and the terms defining the responsibilities of the claimant to demonstrate
entitlement to requested change orders or claims.

For more discussion concerning the project change management process, refer to AACE International’s RP 100R-19,
Contract Change Management – As Applied in Engineering, Procurement, and Construction. [1]

In the engineering, procurement, and construction industry, the primary change management tool used to
document and authorize changes to the contract is the change order, also referred to as a variation order or contract
modification / amendment.

A change order is defined as:

A document requesting and/or authorizing a scope and/or baseline change or correction. 1) From the
owner’s perspective, it is an agreement between the project team and higher authority approving a change
in the project control baseline. 2) From a contractor’s perspective, it is an agreement between the owner
and the contractor to compensate for a change in scope or other conditions of a contract. It must be
approved by both the client and the contractor before it becomes a legal change to the contract.1

In the context of a project, change is defined as an “alteration or variation to a scope of work and/or the schedule
for completing the work.”2 However, changes can include more than alterations or variations to work scope. Change

1
AACE International, Recommended Practice 10S-90, Cost Engineering Terminology, AACE International, Morgantown, WV. (Latest revision). [2]
2
Ibid.

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can also include revisions to contract terms, sequences of work, alteration of work conditions, and other
administrative revisions. A change may be directed by the client or discovered as being necessary due to facts and
circumstances that are identified during the course of the project. Construction contracts differ from most legal
agreements in that they anticipate that changes will occur.

A number of different events, changes, or owner-responsible actions can influence the development of change
orders on projects. These events, changes, or owner-responsible actions can result from either foreseen or
unforeseen conditions, many of which are listed and described in AACE International Recommended Practice 100R-
19.3

Before a change order is executed between the parties, typical construction contracts require a COR, or proposal,
first be submitted by the contractor to the owner as well as related predecessor and successor actions (i.e., notice,
follow-up, and resolution). A COR is defined as:

A proposal from a claimant concerning a requested change to the contract’s compensation amount or
payment terms, time of completion, product or performance specification, or other terms within the
contract.

The COR should provide enough relevant information and analysis to adequately demonstrate the contractor’s
entitlement to variances in cost or schedule associated with the change in scope. However,

Change is not made without inconvenience, even from worse to better. 4

Even after more than 250 years, the meaning of the above quote continues to have significant relevance in the
project engineering, procurement, and construction industries. Changes on projects often create a varying amount
of tension between the parties of a contract, and at times, create mistrust between these parties. However, in
industries in which projects are the norm, it is now typically understood that change is endemic.5

The inconveniences that often occur during, and sometimes after, project execution concern steps that owners and
contractors take towards achieving final agreement with respect to a contract COR. The challenges often stem from
the owner’s and contractor’s perspectives as to whether the contractor has adequately provided the documentation
and analyses necessary to demonstrate entitlement to a requested change such that a contract change order should
be executed. The approval of a change order may not occur in a timely manner, which may indicate that the owner
feels the contractor has not provided enough information or analyses to justify increasing the contract compensation
or granting an extension of time to the project schedule. Often, what the owner finds missing in a COR is one or
more of the required elements of a change order, or that one or more are inadequately demonstrated. These
elements are further discussed in the Recommend Practice section.

It is recommended that the elements that should be demonstrated in a contract COR, and the extent to which they
should be described, be agreed upon before the contract is signed and work commences. Experience has shown that
one cannot go into projects assuming a perfect world whereby the owner and contractor have equal understandings
in this regard. Because the potential stakes associated with disputed changes can be significant, many disputes can
be avoided with this common understanding established well before the project begins. To deal effectively with the
changes that might arise on a project, the project participants should have established a common understanding of

3
AACE International, Recommended Practice 100R-19, Contract Change Management – As Applied in Engineering, Procurement, and
Construction, AACE International, Morgantown, WV. (Latest revision). [3, p. 7]
4
Pickavance, K. (2005). Delay and Disruption in Construction Contracts. London, LLP. [4]
5
Turner, J. R. (2009). The Handbook of Project-Based Management: Leading Strategic Change in Organizations, The McGraw-Hill Companies, Inc.
[6]

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what elements must be included in a contract COR and the expected level of detail in defining each. A facilitated
alignment session at the start of the project is a good way to bring such expectations into common agreement.

Disputes often arise due to the parties’ inability or unwillingness to come to an agreement on pending contract
changes in a timely manner. If an agreement cannot be achieved on one or more CORs during project execution, the
contractor may choose to re-submit the disputed CORs as claims at the end of the project to recover cost and time
impacts for which it believes it is entitled. A claim is defined as:

A demand or assertion of rights by one party against another for damages sustained under the terms of a
legally binding contract. Damages might include money, time, or other compensation to make the claimant
whole.6

Just as with a change order request, the same elements must be demonstrated to establish the contractor’s
entitlement to a claim. Typically, once a disputed COR has been submitted as a claim, resolution will have been
escalated to higher levels within both parties’ organizations or to the dispute resolution process established in the
contract.

2. RECOMMENDED PRACTICE

For capital construction projects, it is recommended that a change management process and procedure be planned
and developed for the design and construction phases regardless of the delivery methodology used. However, the
change management plan should align with the specific needs of the project. For example, avoid using a change
management process intended for a cost reimbursable contract on a fixed price contract project. Experience has
shown that most change management processes focus primarily on cost elements of a change and not enough is
written that addresses proper treatment of schedule change management.7

One option of a change management process can be found in AACE’s Recommended Practice 100R-19, Contract
Change Management – As Applied in Engineering, Procurement, and Construction.8

Prior to contract execution, it is recommended that the parties agree to what elements should be included in a COR
to form the bases of the change. It is also recommended that the parties agree on what types of documentation and
analyses would be necessary to serve as support to each of the following basis elements.

2.1. Elements Necessary to Demonstrate Entitlement Basis for a Change Order Request or Claim

For myriad reasons, projects continue to become more complex and expensive, with schedules that seem to become
more aggressive. As a result, the risks for contract disputes also have increased. Clear and concise communication
between the owner and contractor during execution of the project is one of the primary factors in avoiding
misunderstandings, which often lead to disputes. One of the most frequent causes of disputes on construction
projects is the inability for the owner and contractor to come to an agreement on contract changes. It is expected
that a significant number of contractual change disputes can be avoided or eliminated by the early establishment
of: a) a clear and concise change management process;9 and b) a clear set of demonstrated elements that define the
6
AACE International, Recommended Practice 10S-90, Cost Engineering Terminology, AACE International, Morgantown, WV. (latest revision) [2]
7
It is recommended that the reader review AACE RP-109R19, Schedule Change Management, for a basic review of the schedule change
management process. [12]
8
AACE International, Recommended Practice 100R-19, Contract Change Management – As Applied in Engineering, Procurement, and
Construction, AACE International, Morgantown, WV. (latest revision) [3]
9
Further discussed in AACE International, Recommended Practice 100R-19, Contract Change Management – As Applied in Engineering,
Procurement, and Construction, AACE International, Morgantown, WV. (latest revision) [3]

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bases for a contract change. These same elements would also be applicable should a disputed change order evolve
into a claim.

Typically, contracts place the burden of demonstrating the following elements on the claimant. For an owner to
approve a change order requested by a designer or contractor, the following are seven primary basis elements of
the request that should be satisfactorily demonstrated. They are identified as:

1. Causal event occurrence;

2. Adherence to contract change notice requirements;
3. Contractual entitlement to request a contract change or make a claim;
4. Causation;
5. Prudent effort to mitigate any impacts;
6. Assignment of responsibility; and
7. Quantification of impacts.

The following is a description of each element and why it is important to be included in the change order request or
claim.

2.1.1. Causal Event Occurrence

Before a contractor can establish causation (see item no. 4), this element establishes whether an event that
potentially caused an impact has actually occurred. Normally, upon discovery of the changed condition, this
knowledge is shared amongst the contractor’s project team so that the appropriate internal steps are taken to
initiate and support the change order request. A causal event that impacted the contractor may also have been an
action that did not take place, such as a missed deadline by a party it had no control over but had to rely on to
complete its work. This element of a substantiating that a causal event occurred may seem to be simple to
demonstrate, but failure to do so has led to many disputes.

A simple example could be determining whether adverse weather occurred such that it impacted the contractor’s
ability to work. Typically, contracts allow the contractor to submit a change order request if it was impacted as a
result of adverse weather.10 Sometimes, there can be a dispute on whether a rain event occurred at all, especially at
locations where rain measurement stations are too far away to adequately quantify the amount of rain that fell on
the project site. Of course, actions should be taken prior to the project’s onset to account for and quantify the
possibility of adverse weather, but these measures are not always anticipated or are simply not taken.

As the claimant, it would be the contractor’s responsibility to demonstrate that the event did indeed occur.
Therefore, the contractor would have to provide evidence in the form of such records including certified test results,
photographs, contemporaneous weather records, first-hand testimonials, minutes of meetings, and other
documentation to show that the event that caused the impacts for which it has claimed did occur.

Without first demonstrating or gaining acknowledgement from the owner that an event occurred, it would be
impossible to demonstrate a causal relationship to the alleged resulting impacts.

10
For more discussion concerning adverse weather impacts, see AACE International Recommended Practice 84R-13, Planning and Accounting
for Adverse Weather, AACE International, WV. (latest revision) [10]

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2.1.2. Adherence to Contract Change Notice Requirements

It is important that all parties to a contract be familiar with the terms of the contract. In this case, particular focus
should be on the change management process and the claims submission process, part of which should include the
submission of a proper and timely notice.

Typically, construction contracts require that once the contractor has identified a potential changed condition, it has
a specified number of days to provide notice to the owner of a potential change; the submission of other
documentation may also be subject to time limitations.

The first step in requesting a change order or prosecuting a change order claim is to recognize the potential
contractual basis for an adjustment in time or price. Early recognition is required to ensure that notice
requirements are met, and that costs and documentation needed to support the change order claim are
maintained.11

Among the reasons timely notification should be submitted to the owner are the following:

• Provides the owner a chance to examine the actual conditions on-site or investigate the issues under
examination at the time of their occurrence;
• Gives the owner a better chance to mitigate the potential adverse effects of the issues under examination
(e.g., delay-causing events, adverse conditions, previously unknown site conditions, or changes to the
scope);
• Provides the owner with an opportunity to explore more reasonable and/or less costly options, and possibly
change its work plan by:
• Modifying the design to avoid or otherwise better manage pertinent risks;
• Requesting the contractor to provide a proposal or change order request to execute the changed work;
• Identifying changes such as change in the contractor’s means and methods or to exclude certain work
elements from the contractor’s scope of work; and
• Provides the owner with an opportunity to adjust its budget and pursue additional funding opportunities
as needed.

Not all notice requirements in a contract are the same. For example, for force majeure and differing site conditions
clauses, notice timing is often shorter than for other types of change / delay. Further, the required elements for a
proper notice may change from one contract clause to another.

Additionally, there may be continuing notice obligations to keep the client updated on how the contractor is
“spending the client’s money”. For example, with respect to notices of delay, sometimes it may take months for a
delay event to run its full course and the contractor to acquire the necessary data to support its claim. In this case,
contracts may require monthly updates be submitted to the owner that inform on the status of delay event.

Contractors often contend that the owner had constructive notice during meetings, progress reviews, and project
progress reports that a change occurred that would impact its time and cost of performance. A contractor should
not solely rely on this contention as there is significant uncertainty that a court or arbitration panel will make an
award based on constructive notice and require formal notice for the COR or claim to prevail.

Often, contracts require that the contractor include a high-level estimate of the pricing and schedule impacts within
the initial notice of change. Informing the owner as early as possible of a potential change and the associated change

11
Callahan, Michael T., editor, Construction Change Order Claims, 2nd ed., Construction Law Library, Aspen Publishers, 2005, §14.02 [5, p. 397]

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to the contractor’s pricing and schedule completion date allows the owner the opportunity to identify and consider
other options if the contractor’s estimated cost and schedule impacts can be avoided or mitigated.

2.1.3. Contractual Entitlement to Request a Contract Change or Make a Claim

In summary, the contractor must demonstrate that it has a contractual right to make the requested change and the
resulting change was not already contained within the scope, specification, or terms of its current agreement with
the owner. There may be specific types of change events that are identified in the contract for which the contractor
is prohibited from requesting a change. It is recommended that an attorney be consulted to determine whether the
contract terms provide entitlement for the claimant to submit a contract COR concerning an event.

Using the adverse weather example again, construction contracts often contain wording that the contractor should
be familiar with the climate conditions of the geographic area of the project site at all times of the year with respect
to potential impacts to the project schedule and other related costs. This type of statement indicates that the
contractor cannot request an adjustment resulting from a climatic event that should have been anticipated as a
possible occurrence based on historical climatic records. Before the start of the project, the contractor should
identify anticipated climate-related risks and incorporate their potential impacts within its proposed bid/budget,
cost / schedule basis documentation, and project baseline schedule.12

2.1.4. Demonstration of Causation

Once a causal event has been demonstrated to have occurred or is occurring, the next test for the contractor is to
demonstrate that this event contemporaneously impacted its forecasted final costs and completion date. Although
the event is contemporaneous, its impacts may not be felt until far into the future of the project. The contractor
must demonstrate that there was a cause-and-effect relationship between a causal event that was not its
responsibility (or there was a shared responsibility) and the effects that event had on its ultimate project cost or
ability to finish the project by the current contract completion date.

Demonstrating causation is often the most difficult aspect of a COR for the contractor to prove, especially if the
contractor did not keep good project records. Often the need to start capturing detailed and relevant documentation
should have been underway before the change event occurred. It is not typically feasible for a contractor to keep
records in anticipation for the possibility that a change might occur. Quite often, an event arises and issues such as
productivity loss are not immediately understood; therefore, it does not immediately trigger the start of detailed
record keeping.

A list of common causes of changes can be found in RP 100R-19.13

Reverting back to the rain event example, the contractor will have to demonstrate that the magnitude of the adverse
rain that occurred was not only unanticipated per the terms of the contract, but also affected the project’s ability to
move forward efficiently, or not at all, as per the schedule. It must also be demonstrated that additional costs were
incurred to mitigate or respond to the rain’s effects. It is recommended that the contractor provide labor and other
productivity records, photographs of work affected by the rain, correspondence, vendor records, and evidence that

12
Refer to AACE International Recommended Practice 84R-13, Planning and Accounting for Adverse Weather, AACE International, Morgantown,
WV (latest revision). [10]
13
AACE International Recommended Practice 100R-19, Contract Change Management – As Applied in Engineering, Procurement, and
Construction, AACE International, Morgantown, WV. (latest revision) [3, p. 7]

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the project’s critical path was impacted by the event.14 There should be a clear understanding of the work that was
contemporaneously on or near the critical path at the time the causal event occurred. Typically, critical path work
must be impacted for the contractor to be granted a schedule time extension. Additionally, the contractor should
demonstrate concurrent delay if it occurred.

The recommended course of action that an owner and contractor should take to either demonstrate or refute
causation for an event that caused a cost or schedule impact is to collect and maintain good records during the
project.

2.1.5. Prudent Effort to Mitigate any Impacts

Typically, contracts require that both parties have a duty to mitigate the impacts of a change. However, if a
contractor intends to request a change order for impacts resulting from a change, the owner will typically request
that the contractor demonstrate the mitigation efforts it performed and the show the resulting effects. It is
recommended that a contractor confronted with a changed condition should make its best efforts to mitigate the
potential impacts of the change. Oftentimes, construction contracts contain clauses that require the contractor to
demonstrate that it mitigated, or prudently attempted to mitigate, the impacts of any adverse changes or events
occurring on the project. Providing evidence that the contractor acted to avoid or mitigate the impacts resulting
from a change should indicate to the owner that the COR resulted only after the contractor did its best to reduce
the cost and schedule impacts.

By identifying and performing impact avoidance or mitigation efforts resulting from a changed condition to the
project typically indicates the contractor did what any prudent contractor should do. These efforts should also
demonstrate to the owner the contractor’s intentions to collaborate with the owner with respect to completing the
project as efficiently as possible from a cost and schedule perspective.

2.1.6. Assignment of Responsibility

Identifying the party that is responsible for a change may seem simple to demonstrate, and often is. For example,
the owner would most likely be responsible for the additional costs that arise as a result of a change in scope that it
directed. However, this is not always the case when determining who is responsible for delay and the associated
costs. This can sometimes be challenging, especially when other intervening effects are simultaneously impacting
the project schedule.

With respect to delays arising from changes, , including owner-directed changes, the contractor will have to
demonstrate that the change impacted the project schedule’s critical path or other contractually-defined milestones
at the time that the change occurred. If the contractor cannot demonstrate that the change will affect the
contemporaneous critical path once the changed work is performed, then there are no time impacts to the project
completion date. However, there may be events that affect the contractor’s direct cost of performing the work even
though the event, change, or owner-caused action did not affect the current critical path of the project; for example,
acceleration or disruption costs. An event, change, or owner-caused action may result in delay to a subcontractor’s
work that was not on the current project critical path, but that subcontractor’s work was extended in time compared
to its planned schedule for completion, and thus its time related costs were increased. For more discussion on the
elements of delay analysis refer to RP 29R-03. [1]

14
Refer to AACE International Recommended Practice 84R-13, Planning and Accounting for Adverse Weather, AACE International, Morgantown,
WV (latest revision). [10]

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Additionally, even if the contractor can demonstrate that there was a change that impacted the critical path, it must
also demonstrate whether there was or was not concurrent delay.15 In cases where concurrent delay can be
demonstrated to have occurred, one delay that was caused by the owner and a concurrent delay that was caused
by the contractor, the contractor may only be entitled to a time extension but no time-related costs unless the
contract provides otherwise.

Lastly, determining responsibility for a change and its resultant impacts can be difficult to establish retrospectively
as a result of poor project documentation, especially when: a) a change was not specifically directed by the owner,
b) occurrence of the causal event cannot be established, or c) when causation cannot be clearly determined. As
noted previously, it is important for both parties to maintain good records contemporaneously throughout the life
of the project.

2.1.7. Quantification of Impacts

For the contractor to be granted an increase to its contract price or a time extension as a result of a contract change,
it must quantify the associated impacts. That is, the contractor must calculate how much additional money and time
would be needed to successfully complete the project according to the terms of the contract.

The contract should define what documentation the contractor is to submit to the owner in support of its requested
cost16 and time extension quantifications that result from a contract change. However, contracts are often silent or
ambiguous with respect to what supporting analyses and documentation the contractor is to provide. This
understanding is especially important when the changes are related to quantifying the effects of disruption and
project delays.

It is recommended that the contractor demonstrate that the cost or schedule impacts, which have been or will be
realized as a result of the change, are reasonable and supportable. Although these terms can be subjective in
interpretation, it is important that the claimant only include quantification of costs or delays that it can reasonably
support. For U.S. Government projects, the Federal Acquisition Regulations (FARs) are clear as to what types of
changes are allowable and what is necessary to support a variation order request or claim. Additionally, it is
recommended that the contractor provide the necessary supporting documentation such that the owner can
replicate the analysis used by the contractor to arrive at a similar result.

Concerning a time extension request, if not specified in the contract, a common way to contemporaneously quantify
forecasted schedule impacts is through the use of time impact analysis,17 using the most recent schedule update
prior to the occurrence of the event, change, or owner-caused action or inaction.

The amount of information and analyses necessary to demonstrate each element should be scalable based on the
complexity of the project and the specific issue being evaluated in the COR or claim.

15
A common definition of concurrent delay occurs when “Two or more delays that take place or overlap during the same period, either of which
occurring alone would have affected the ultimate completion date.” AACE International, Recommended Practice 10S-90, Cost Engineering
Terminology, AACE International, Morgantown, WV. (latest revision) [2]
16
The requested cost in this context, sometimes referred to as quantum, is the incremental change to the contract price.
17
Refer to AACE International, Recommended Practice 52R-06, Time Impact Analysis – As Applied in Construction, AACE International,
Morgantown, WV. (latest revision) [9]

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2.2. The Elements are Inter-related

Each of the above-described elements of a change order request or claim are individually important in demonstrating
entitlement to additional costs and time extensions. However, each cannot be considered individually without also
being considered collectively. Each of the seven elements are inter-related and, in some way, may affect the
contractor’s ability to demonstrate the other elements. For example, causation cannot be determined until the
causal event has been identified as having occurred, and responsibility cannot be determined without understanding
what caused the change, when it occurred, and legal entitlement has been demonstrated.

When there are disputed changes (i.e., claims), these relationships are often complex and require a thorough
understanding of all seven elements to also understand their interconnectivity.

2.3. Document Retention and Organization

As previously noted, it is highly recommended that the claimant contemporaneously collect and maintain project
records throughout the life of the project. Often, the records kept early in the project will be helpful in demonstrating
a change occurred later in the project. This point cannot be emphasized enough. It is also important that
contemporaneous documentation be kept to support schedule updates.

Experience has shown that the best way to demonstrate all the above elements of a COR or claim is by collecting
and organizing project documentation to address each element. As noted previously, adequately defining a cause-
and-effect relationship between an event and the resulting impacts is typically the most difficult element for a
contractor to demonstrate. Without the necessary document to make such demonstration will most likely result in
a failure to demonstrate entitlement to any resulting impacts.

In turn, the owner should also collect and maintain its own set of records. Depending on the contract terms, the
owner may have access to all documents that the contractor generates on the project, or the owner may have very
little documentation other than progress reports and schedule updates. It is important that the owner document
the project over time via photographs and videography, and ensure that meetings with the contractor are frequent
and documented.

In anticipation of change negotiations, whether for a COR or a claim, a well-organized change management
document control system will facilitate quick access to information that either supports or refutes changes or claims
under consideration.18

2.4. Change Order Request or Claim Submission

It is important that the COR or claim is written in as concise and cogent manner as possible. Graphics are always
helpful in communicating points that would otherwise require multiple paragraphs to describe. Claim visuals can
play important roles in simplification and proper presentation of a claim, especially in complex cases, because they
are used to organize records, findings, and analyses in the most efficient and visually attractive ways using illustration
techniques. The use of these techniques along with other elements of a claim such as claim narratives and other
supporting documents improves readability and makes the arguments more compelling. The goal is to better
illustrate the merits of a claim by using effective illustration techniques.

18
AACE International, Recommended Practice 100R-19, Contract Change Management – As Applied in Engineering, Procurement, and
Construction, AACE International, Morgantown, WV. (latest revision) [3]

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Whether a COR or claim, it should be submitted using the following guidelines:

1. The submission should present a complete package, with all necessary supporting data, so that it be
utilized…as the basis for proving the claim with little extra work.
2. The presentation should offer a complete, accurate, and truthful narrative about the conditions
encountered on the project.
3. The presentation should admit and take into account problems that are the…claimant’s…own
responsibility and that had a significant effect on the project. (The alternative to this can be a disaster
when the…claimant’s…credibility is shattered at a hearing or trial.)
4. Finally, the submission should reflect pricing that is not grounded in the “twilight zone.”19

The contractor’s COR or claims submission should be based on facts and avoid attempting to rely on opinions or
other information that is not fact-based.

Lastly, the COR or claim preparation and settlement process can be prolonged by the procedures of the owner's
organization (bureaucracy/red-tape), the scope of the changes, and the number of the contractor's first-tier
subcontractors, vendors, and suppliers that are involved with the changed/claimed scope of work.

REFERENCES

[1] AACE International, Recommended Practice No. 100R-19, Change Management as Applied in Engineering,
Procurement, and Construction, Morgantown, WV: AACE International, Latest revision.
[2] AACE International, Recommended Practice No. 29R-03, Forensic Schedule Analysis, Morgantown, WV: AACE
International, Latest revision.
[3] AACE International, Recommended Practice No. 10S-90, Cost Engineering Terminology, Morgantown, WV:
AACE International, Latest revision.
[4] K. Pickavance, Delay and Disruption in Construction Contracts, 3rd ed., A. Burr and A. Axelson, Eds., LLP,
2005.
[5] M. T. Callahan, Construction Change Order Claims, 2nd ed., Aspen Publishers, 2005.
[6] J. R. Turner, The Handbook of Project-Based Management: Leading Strategic Change in Organizations, 3rd
ed., New York: McGraw-Hill, 2009.
[7] M. Park and F. Pena-Mora, "Dynamic change management for construction: introducing the change cycle
into model‐based project management," System Dynamics Review, vol. 19, no. 3, pp. 213-242, 2003.
[8] H. L. Stephenson, Ed., Total Cost Management Framework: An Integrated Approach to Portfolio, Program
and Project Management, 2nd ed., Morgantown, WV: AACE International, Latest revision.
[9] AACE International, Recommended Practice No. 52R-06, Time Impact Analysis – As Applied in Construction,
Morgantown, WV: AACE International, Latest revision.
[10] AACE International, Recommended Practice No. 84R-13, Planning and Accounting for Adverse Weather,
Morgantown, WV: AACE International, Latest revision.
[11] J. M. Wickwire and T. J. Driscoll, Construction Scheduling: Preparation, Liability, and Claims, 2nd ed., Aspen
Publishers, 2003.
[12] AACE International, Recommended Practice No. 109R-19, Schedule Change Management – As Applied in
Construction, Morgantown, WV: AACE International, Latest revision.

19
Wickwire, Jon M., Driscoll, Thomas J., et al, Construction Scheduling: Preparation, Liability, and Claims, 2nd ed., Construction Law Library, Aspen
Publishers, 2003, §14.04[A] [11, p. 615]

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CONTRIBUTORS

Disclaimer: The content provided by the contributors to this recommended practice is their own and does not
necessarily reflect that of their employers, unless otherwise stated.

Dr. Stephen P. Warhoe, PE CCP CFCC FAACE Hon. Life (Primary Contributor)
Saad Ishac
Richard J. Long, PE
Donald F. McDonald, Jr. PE CCP PSP FAACE Hon. Life
Dr. Seyyed Amin Terouhid, PE DRMP PSP

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