Extra work, no change order: how subs end up working for free

It happens on every job. The plans change, the superintendent needs it done today, and someone says "go ahead, we'll paper it later". Months later the change order log shows nothing, and the GC points to the subcontract.

The subcontract usually wins. Here's why, and how to stay on the right side of it.

The clauses that decide it

Most subcontracts handle extra work with some combination of these:

• Written authorization. "No extra work will be paid unless authorized in a written change order signed by Contractor before the work is performed."
• A named person. Only the project manager, or an officer, can sign a change order. The superintendent can't.
• Notice deadlines. You must give written notice of a claim for extra time or money within a set period, sometimes as short as 48 or 72 hours, or the claim is waived.
• Pricing rules. How extras are priced: agreed lump sum, unit prices, or time and materials with a capped markup.
• Keep working. You must perform disputed work while the dispute is resolved, often with no right to stop.

Put together, these mean a sub can be required to do the work, then lose the right to be paid for it because the paperwork came late or was signed by the wrong person.

Do courts ever let it slide?

Sometimes, but don't count on it. California recognizes that a written change order or notice requirement can be waived by conduct, for example when extras are routinely ordered and paid for without the paperwork. The state's civil jury instructions cover the question (CACI 4522), and the bar is high: waiver generally has to be shown by clear and convincing evidence that the right was knowingly given up. On public projects, written change order requirements generally can't be waived this way at all. Either way, it's an argument you make in litigation, after you've stopped getting paid. It's not a plan.

A field routine that protects you

1. Get it in writing before you start. An email or text from the person with authority, describing the work, is far better than nothing. Then follow the contract's formal process.
2. Send notice on time, every time. If the contract says 72 hours, diary it. Send notice even when the conversation on site is friendly.
3. Price it, or reserve it. If you can't agree a price before the work, say in writing that you're proceeding under protest and will submit pricing.
4. Track it separately. Separate cost codes, daily tickets signed by the GC's field staff, photos.
5. Don't sign away claims in a pay application. Some pay application forms say all claims to date are resolved. List open change orders as exceptions, in writing.

What to ask for in the subcontract

• A notice period you can actually meet: seven to ten days rather than 48 hours, measured from when you knew or should have known of the change.
• Directives: if the GC orders you to proceed without an agreed price, you get paid on time and materials until the price is agreed.
• Payment for undisputed extras in the next pay application, not at the end of the job.
• A named field person, such as the superintendent, who can authorize urgent work up to a set dollar amount.

The fight over extras is usually lost in the first week of the job, at signing. That's the cheapest time to fix it.