Written by: Brian S. Schaps
The Louisiana legislature recently amended La. R.S. 38:2212(M) governing change orders on public works projects. A change order is a written amendment to an existing construction contract that alters the work to be performed, the contract sum, and/or the contract time. A public works project is the erection, construction, alteration, improvement, or repair of any public facility or immovable property owned, used, or leased by a public entity.
The amendment to La. R.S. 38:2212(M) now requires that change orders must include fully documented and itemized costs for labor and equipment included in the change order.
For any change order requiring redesign, the amended law now requires that the redesign shall not take more than 90 days following notification by the contractor to the designer of record, or in the absence of the designer, the public entity, of the discovery of work to be performed by the change order. Extensions of time may be granted by the public entity if necessary for the redesign.
Upon completion of the redesign, the contractor must submit a cost estimate to the designer or the public entity for the change order within 45 days for the redesigned work to be performed under the change order. The public entity has 30 days from the submittal of the change order to negotiate, approve, or reject the contractor's proposed cost estimate of the work. Extensions of time may be granted by mutual agreement or shall be granted as necessary for the public entity to obtain governmental approval.
The prior law had provided that no deviations were allowed in change orders where unit prices were contained in the initial contract. The new amendment now allows for, but does not require, change orders which relate to certain unit price work to be negotiated if notice of the change order work and proposed new pricing is provided within 30 days of the discovery of the work to be performed by change order.
Finally, the contractor shall not be required to provide any schedule updates incorporating a change order until the change order is executed, unless the schedule is needed for evaluation of the proposed change order.
These amendments became effective on August 1, 2023, and the requirements of these amended provisions cannot be waived by contract.