A common procedure for subcontractor change orders starts with the project owner’s representative informing the prime contractor of desired changes in the work. The contractor then informs the appropriate subcontractor. Based on information provided by the sub, the contractor submits a change order request to the owner. An approved change order increases the prime contract price, enabling the contractor to pay the subcontractor for the changed work. When and how the contractor and its sub price the changed work is a matter between the two, but it is the prime contractor’s responsibility to pay the subcontractor.
A Kansas appellate court recently addressed a situation in which a project owner directed extra work. A subcontractor performed that work prior to owner approval of a change order. When the owner refused to increase the prime contract price, the sub was left unpaid. Could the subcontractor recover payment directly from the owner under a theory of unjust enrichment? Only if the owner knew, at the time the changed work was performed, that the sub was performing with the expectation it would be paid directly by the owner.
The other case in this issue involved a project where inadequate contractor recordkeeping challenged scheduling experts for both the contractor and the federal government. The Civilian Board of Contract Appeals criticized aspects of the analytic methodology involving float time in the schedule and the pricing of extended job site overhead.
