Verbal Change Order on a Public School Renovation
You are the plumbing contractor on an $860,000 renovation of an occupied elementary school in Broward County. The drawings show a new corridor slab over existing fill with no utilities indicated crossing the area. During demolition your crew exposes a live 6 in. cast iron building drain and two abandoned electrical conduits running exactly where the new corridor slab and two new floor drains must go. You call the architect, who says by phone, keep going, we will work it out in a change order. You reroute 120 ft of 6 in. PVC, add two manholes, and make a grease interceptor tie-in. Three weeks later the owner's project manager refuses the $34,500 invoice because no written change order exists, and your contract requires written notice within 10 days of an event and a signed change order before proceeding.
1. What did your company do wrong, and what should have happened at the moment of discovery?
Read the worked answer
You acted on an oral directive and let a 10-day written notice window run while the crew kept digging. The clock started the day the drain was exposed.
What should have happened the same day:
- Stop the affected work only - not the whole job. Protect the schedule, not just the claim.
- Send written notice of a differing site condition and an RFI within 24 hours, well inside the 10-day window.
- Send a one-page letter confirming the phone call: date, time, who said what, and your understanding that the owner directs the reroute as a change. Send it by email and certified mail.
- Open a daily T&M record: names, hours, equipment on site, material tickets, and a signature from the owner's representative or CM every single day. Unsigned T&M sheets are worth very little.
- Submit a cost proposal - labor, material, equipment, overhead and profit, and schedule impact - before or while proceeding, and state in writing that you are proceeding under protest and reserving all rights.
- Photograph and video the unobstructed condition with a scale and a date stamp before covering it.
2. What records and contract provisions carry your claim?
Read the worked answer
- The differing site condition clause and any changed-condition provision: a subsurface condition materially different from what the drawings disclosed.
- Notice provisions. The RFI log and the confirmation letter establish timely notice. The phone call alone does not.
- Daily reports, photographs, delivery tickets, equipment logs, certified payroll, and signed T&M sheets - these prove the cost, not the entitlement. Entitlement without proof of cost pays nothing.
- The direction itself. Even unrecorded, the fact that the owner's representative directed the work and that the work was inspected and accepted supports recovery on a quasi-contract theory if the change-order clause fails.
- Schedule records if you claim impact costs: updated schedules, manpower loading, and correspondence about delays.
- The proceed-under-protest and reservation-of-rights language in your letters, which keeps the dispute alive instead of waiving it.
3. How do you resolve this if the owner continues to refuse?
Read the worked answer
First, recognize the leverage you do not have: this is a public school, so there is no mechanic's lien against the property. The remedy is a claim against the payment bond under the public works statute, and the notice deadlines are strict. Calendar them the day you start furnishing, not the day you get angry.
Sequence:
- Sit down with the architect and the owner's PM with the daily T&M sheets, the confirmation letter, and a one-page timeline. Architects do not like being made to look like they authorized work the owner will not pay for.
- Offer a face-saving structure: direct cost plus a negotiated markup paid within 30 days, with the schedule-impact portion dropped. Settling for $28,000 now beats $34,500 in eighteen months.
- If refused, send a formal written demand, preserve the bond claim, and follow the contract's dispute ladder - usually mediation before suit.
- Internally, treat this as a process failure, not a legal one. Put a verbal-directive confirmation form in every superintendent's truck, a T&M book in every truck, and a notice calendar on the office wall. The next one is already out there.