Oral Change Directive and Late Delay Notice on a School Project
A fire sprinkler subcontractor has a $1.85 million contract on a 180,000 sq ft K-12 school. The subcontract requires all changes to be authorized by a written change order signed by the general contractor and requires notice of any delay within five calendar days. In month four, the GC's superintendent orally directs the subcontractor to add 40 sprinkler heads in a redesigned media center. The subcontractor performs the work and submits a $28,000 change order 30 days later. In the same month, structural steel deliveries are 45 days late, and the sprinkler crew is demobilized for three weeks; standby and remobilization costs are $12,000. The GC rejects both the change order and the delay claim as untimely. The subcontractor has not submitted a written notice, but its daily reports mention the oral direction and the steel delay. The project is 60 days from substantial completion and the subcontractor's next monthly pay application is due.
1. Evaluate the subcontractor's entitlement to the $28,000 change and the $12,000 delay cost. Discuss notice, oral directives, waiver, and documentation.
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The starting point is the subcontract's written-change and notice clauses. A five-day notice requirement is generally enforceable, and the subcontractor missed it for both the change and the delay. That does not automatically end the analysis, but it creates a serious risk that the claims are barred or reduced.
For the $28,000 change, the superintendent's oral direction is evidence that the GC authorized the work. The GC had knowledge of the added heads and accepted the benefit. The daily reports mentioning the oral direction help, but they are not a formal change order. The subcontractor should argue waiver or ratification by conduct, but it should not assume it will win. For the delay cost, the steel delay was not the subcontractor's fault, and the GC's own schedule knowledge may support the claim, but the missed notice is a weakness.
The practical position is mixed: entitlement is arguable, not certain. The subcontractor should immediately submit a written notice and a detailed change order for both claims, state that it is continuing work under protest to avoid delaying the project, and reserve all rights. It should also review whether the GC's rejection is consistent with how the GC has treated other late notices on the project.
2. What specific actions and records should the project manager put in place now to protect the company's position?
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The project manager should send a written notice within the next business day, even though the contractual deadline has passed. The notice should identify the oral directive, the date, the person who gave it, the added scope, the steel delay dates, the demobilization dates, and the costs incurred. It should request a written change order and a time extension.
Support the notice with a package: daily reports, superintendent emails or texts, meeting minutes, photos, the revised media center drawing, payroll and equipment records for the standby period, and a schedule analysis showing the 45-day steel delay and the three-week demobilization. Prepare a detailed cost breakdown for the $28,000 and $12,000, including labor, materials, equipment, and overhead. Update the schedule to show the actual sequence.
On the payment side, submit the next pay application with the disputed amounts clearly identified and supported. Review the subcontract for notice-to-owner and lien provisions, and calendar any deadlines. Do not stop work over the dispute unless the contract clearly permits it; continued performance protects the schedule and the company's position while the claims are resolved.