A Verbal Direction from the Wrong Person
You are the contractor's project manager on a $22M fixed-price wastewater treatment upgrade. On a site walk, the owner's operations superintendent points into the pump room: 'Move those three MCC panels to the east wall so my operators can reach the valves. It's a small thing - just do it and we'll sort the paperwork out later.' Your estimator puts the relocation at about $9,800 in direct labor and materials, but the electrical rough-in is on the critical path and the relocation adds 10 working days. The contract requires all changes to be directed in writing by the owner's designated representative, who is the capital projects manager, not operations. Notice of a change must be given within 14 days.
1. What do you do in the next 48 hours?
Read the worked answer
Do not refuse to cooperate and do not start the work. Sequence:
- Capture it in writing immediately. Record date, time, location, who said what, and your response. This protects the notice clock.
- Issue a written notice / field direction request within the 14-day window to the capital projects manager, not to operations. This preserves your right to time and money even if nothing is authorized yet.
- Estimate and price it before anything moves. $9,800 direct plus markups, plus the 10-day critical-path impact priced separately.
- Request written authorization to proceed from the designated representative. Only that signature obligates the owner.
- If someone with authority directs you to proceed anyway, do it under written protest: 'proceeding at owner's direction, reserving all rights to time and compensation.' That preserves a constructive-change position.
The trap is that the request sounds small and reasonable. Small and reasonable is exactly how unpriced work gets built.
2. The direct cost is under $10,000. Why does the schedule impact change the decision?
Read the worked answer
Because $9,800 is the wrong number to weigh. The real exposure is 10 working days on the critical path, and that is priced in days of extended site overhead, supervision, equipment rental, and possibly winter or seasonal productivity loss - often several times the direct cost. It also consumes schedule contingency you may need for a risk with a higher probability.
Three consequences the cost figure hides:
- Float. The change eats float that belongs to other risks. A change that consumes float has a cost even when it costs nothing.
- Contractual position. A 10-day critical-path impact is a time-impact entitlement, and if you do not notify within 14 days you may forfeit it.
- Precedent. Accepting a verbal instruction from operations once teaches the owner that operations can direct your scope. The next 'small thing' will not be small.
Recommend a time impact analysis on the affected path before you commit to a number, and quote cost and time as separate line items.
3. Suppose the superintendent performs the move without any paperwork. What is the contractor's position six months later?
Read the worked answer
Weak, and weaker than the site team will believe.
- Fixed price means no recovery without a change. The base contract price covers the specified scope; unauthorized work performed voluntarily is generally uncompensated.
- Notice provisions are conditions precedent. If the 14-day notice was not given, many contracts bar the claim outright regardless of merit.
- Constructive change is arguable but hard to prove. You would need to show the work was directed, not volunteered, and that you protested at the time. Silence plus performance reads as acceptance.
- Waiver and estoppel cut both ways. The owner can argue you waived the written-change requirement by performing; you can argue they waived it by directing. That is a dispute, not a claim.
The lesson: the 14-day clock and the designated-representative clause are not bureaucracy; they are the only mechanism that converts a verbal request into money. Field staff must be trained to log and forward verbal directions the same day, even when the answer is 'we'll sort it out later.'