Change Order Template — Alabama (Jurisdictional)

CHANGE ORDER

State of Alabama — Contract Modification Instrument

Change Order No.: [____]
Date of Issuance: [__/__/____]
Master Agreement Reference: [________________________________]
Project Identification: [________________________________]
County of Performance: [________________________________], Alabama

Section 1 — Identification of Parties

1.1 Owner / Awarding Authority.

Name: [________________________________]
Type: ☐ Private Entity ☐ State Agency ☐ County ☐ Municipality ☐ School Board ☐ Other Public Body
Address: [________________________________]
City, County, State, ZIP: [________________________________], [________________________________] County, AL [____]
Authorized Representative: [________________________________]
Email: [________________________________]
Phone: [________________________________]

1.2 Contractor.

Legal Name: [________________________________]
Alabama General Contractor License No.: [________________________________]
License Classification: ☐ General Building ☐ Highway and Heavy ☐ Municipal and Utility ☐ Specialty: [____________]
Address: [________________________________]
City, County, State, ZIP: [________________________________], [________________________________] County, AL [____]
Authorized Representative: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Note: Alabama requires licensure for general contractors through the Alabama Licensing Board for General Contractors (Ala. Code § 34-8-1 et seq.) for projects exceeding $50,000.

1.3 Subcontractor(s) Affected by This Change Order (if any).

Section 2 — Recitals and Legal Basis

2.1 WHEREAS, Owner and Contractor entered into a Master Agreement dated [__/__/____] for the Work described therein;

2.2 WHEREAS, the Parties desire to modify the scope, cost, or schedule of the Work;

2.3 WHEREAS, this Change Order is issued in compliance with the Master Agreement and applicable Alabama law, including:

(a) Ala. Code § 8-29-1 et seq. (Prompt Payment of Contractors on Private Construction Projects, establishing payment deadlines and interest penalties);

(b) Ala. Code § 39-1-1 et seq. (Public Works Law, governing change orders on public construction);

(c) Ala. Code § 7-2-209 (UCC Article 2, permitting modification of contracts for the sale of goods without additional consideration, subject to good faith);

(d) Ala. Code § 8-9-2 (Statute of Frauds, requiring a writing for agreements not performable within one year);

2.4 WHEREAS, for public works projects, additive change orders resulting in cumulative changes exceeding ten percent (10%) of the original contract amount require the signature of the Awarding Authority's legal counsel pursuant to Alabama Division of Construction Management procedures;

2.5 WHEREAS, the modification described herein is necessary for the reason(s) in Section 4;

NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows:

Section 3 — Definitions

3.1 "Contract Price" means the total compensation payable under the Master Agreement as adjusted by all prior Change Orders.

3.2 "Contract Time" means the duration allowed for completion, as adjusted.

3.3 "Pay Request" means a written request for payment submitted by Contractor that complies with the Master Agreement and applicable law.

3.4 "Work" means all labor, materials, equipment, and services required under the Master Agreement as modified by this Change Order.

Section 4 — Description and Justification of Change

4.1 Nature of Change. Check all that apply:

☐ Additive Change (additional scope and/or cost)
☐ Deductive Change (reduced scope and/or credit)
☐ Time Extension Only
☐ Cost Adjustment Only
☐ Combined Scope, Cost, and Time Change

4.2 Reason for Change. Check all that apply:

☐ Owner-Directed Scope Modification
☐ Design Error or Omission
☐ Differing Site Conditions
☐ Regulatory or Code Change (Alabama Building Code, ADA, local)
☐ Force Majeure — Tornado / Severe Weather (specify): [________________________________]
☐ Force Majeure — Hurricane / Tropical Storm (specify): [________________________________]
☐ Force Majeure — Other (specify): [________________________________]
☐ Value Engineering Proposal
☐ Unforeseen Subsurface Conditions
☐ Material Unavailability / Substitution
☐ Environmental Compliance (ADEM requirement)
☐ Utility Conflict
☐ Price Escalation (if permitted under Master Agreement)
☐ Other: [________________________________]

4.3 Detailed Description of Changed Work.

[________________________________]
[________________________________]
[________________________________]
[________________________________]

4.4 Work Added.

4.5 Work Deleted.

4.6 Work Modified.

4.7 Supporting Documentation.

☐ Revised construction drawings (Exhibit A)
☐ Revised technical specifications
☐ Contractor's cost proposal
☐ Subcontractor quotations
☐ Architect's / Engineer's recommendation
☐ Geotechnical report
☐ Environmental report (ADEM)
☐ Photographs / site investigation report
☐ Other: [________________________________]

Section 5 — Impact Assessment

5.1 Schedule Impact.

5.2 Cost Impact.

5.3 Risk Assessment.

Section 6 — Cost Adjustment

6.1 Pricing Methodology.

☐ Negotiated Lump Sum
☐ Unit Prices (per Master Agreement schedule of values)
☐ Time and Materials with Not-to-Exceed Cap of $[________]
☐ Cost of Work Plus Fee ([____]%)
☐ Force Account (public works)
☐ Other: [________________________________]

6.2 Detailed Cost Breakdown. (See also Exhibit A.)

6.3 Markup Schedule.

6.4 Contract Price Summary.

6.5 Cumulative Change Order Threshold (Public Works).

For public works projects administered by the Alabama Division of Construction Management, additive change orders totaling over 10% of the original contract amount (cumulative) require the Awarding Authority's / Owner's legal counsel signature.

☐ Below 10% — Standard approval process applies
☐ At or above 10% — Legal counsel signature required

Section 7 — Schedule Adjustment

7.1 Milestone Revisions.

7.2 Revised Completion.

7.3 Liquidated Damages. Computed from revised dates. Any modification: [________________________________].

Section 8 — Payment Terms and Statutory Compliance

8.1 Payment for Change Order Work.

☐ Per Master Agreement payment schedule
☐ Lump sum upon completion: $[________]
☐ Progress payments at [____]% of CO Work completed
☐ Milestone payments:

8.2 Retainage. Retainage on Change Order Work: [____]% of each progress payment. Alabama does not impose a statutory cap on retainage for private works; retainage is per the Master Agreement. For public works, retainage is per the contract terms and applicable agency rules. Retainage release: [________________________________].

8.3 Prompt Payment — Private Works (Ala. Code § 8-29-1 et seq.).

(a) Owner to Prime Contractor. Owner shall pay Contractor within 30 days from receipt of a proper pay request, unless the contract provides otherwise (Ala. Code § 8-29-3).

(b) Prime to Subcontractor. Contractor shall pay subcontractors within 7 days of receipt of payment from Owner, unless the contract provides otherwise (Ala. Code § 8-29-3).

(c) Interest on Late Payments. If payment is late or wrongfully withheld, unpaid amounts accrue interest at 1% per month (Ala. Code § 8-29-4).

(d) Attorney's Fees. In an action under the Prompt Payment Act, the prevailing party is entitled to reasonable attorney's fees and court costs (Ala. Code § 8-29-5).

(e) Contractual Modification. Unlike some states, Alabama's private works prompt payment statute permits the parties to modify payment deadlines by contract ("unless the contract states otherwise"). However, the interest and attorney's fees provisions apply regardless.

8.4 Prompt Payment — Public Works (Ala. Code § 39-1-1 et seq.).

(a) State Projects. Payment to prime contractor within 30 days after receipt of a proper invoice.

(b) Local / Municipal Projects. Payment within 35 days of approval of the invoice (for local government entities).

(c) Payment to Subcontractors. Within 7 days of receipt of payment from the public entity, unless the contract provides otherwise.

(d) Interest Rate. Late payments accrue interest at 1% per month.

(e) Attorney's Fees. Prevailing party is entitled to attorney's fees and court costs.

8.5 Disputed Amounts. Owner shall pay undisputed amounts within the applicable time frame and provide written notice of any disputed amounts with specific reasons.

Section 9 — Effect on Master Agreement

9.1 Modified Provisions.

9.2 Unmodified Provisions. All provisions not expressly modified remain in full force and effect.

9.3 Order of Precedence.

1. This Change Order No. [____]
2. Prior Change Orders (reverse chronological order)
3. Master Agreement and all exhibits
4. Original scope of work / plans and specifications

9.4 Cumulative Change Summary.

Section 10 — Representations, Warranties, and Covenants

10.1 Contractor Representations.

(a) Contractor holds a current and valid Alabama General Contractor's License (Ala. Code § 34-8-1 et seq.) in the classification(s) required for the Change Order Work. Under Alabama law, a general contractor's license is required for projects exceeding $50,000.

(b) The cost proposal is accurate, complete, and submitted in good faith.

(c) Change Order Work will comply with the Alabama Building Code, applicable local codes, and all other applicable laws and regulations.

(d) Contractor has the capacity, resources, and workforce to perform the Change Order Work.

(e) Contractor has disclosed all known conditions affecting cost or schedule.

(f) This Change Order represents the full adjustment for the changes described herein. Contractor releases any further claims for the matters addressed, except as expressly reserved.

10.2 Owner Representations.

(a) The signatory has authority to bind Owner.

(b) Sufficient funds have been appropriated or budgeted.

(c) Owner will provide timely access, information, and approvals.

Section 11 — Authorization and Approval

11.1 Required Approvals.

11.2 Third-Party Approvals.

Section 12 — Additional Alabama Legal Provisions

12.1 Statute of Frauds (Ala. Code § 8-9-2). Under Alabama's Statute of Frauds, an agreement that by its terms cannot be performed within one year must be in writing and signed by the party to be charged. This Change Order satisfies the writing requirement for any modifications extending the contract beyond one year from execution.

12.2 Mechanic's and Materialman's Lien (Ala. Code § 35-11-210 et seq.).

(a) Change Order Work constitutes an "improvement" subject to Alabama mechanic's lien law.

(b) Unpaid Statement. A lienor who has not received full payment must file an unpaid statement (verified itemized statement of the claim) within six months after the last item of work or materials was furnished (Ala. Code § 35-11-215).

(c) Lien Enforcement. A suit to enforce the lien must be filed within six months of filing the unpaid statement.

(d) Residential Projects. For owner-occupied residential property, the owner may be entitled to credit for payments made to the prime contractor in good faith without notice of the subcontractor's claim, subject to certain conditions.

12.3 Payment Bond — Public Works (Ala. Code § 39-2-12).

(a) Change Order Work on public projects is covered by the payment bond required under Ala. Code § 39-2-12.

(b) Subcontractors and suppliers must provide written notice to the prime contractor within 45 days of the date on which the subcontractor or supplier performed the last of the labor or furnished the last of the materials for which the claim is made.

(c) Suit on the bond must be filed no later than one year after the date on which the last item of labor was performed or materials were furnished.

12.4 General Contractor Licensing (Ala. Code § 34-8-1 et seq.).

(a) A general contractor's license is required for projects with a total cost of $50,000 or more.

(b) The Alabama Licensing Board for General Contractors issues licenses in classifications including: General Building, Highway and Heavy, Municipal and Utility, and specialty classifications.

(c) A contractor who performs work without the required license may not recover compensation for the work performed.

(d) If this Change Order increases the total contract price above $50,000 and the Contractor was not previously required to hold a license, Contractor must obtain the required license before commencing the Change Order Work.

12.5 Public Works Competitive Bid Law (Ala. Code § 41-16-3).

For public works contracts, change orders should not be used to circumvent competitive bidding requirements. If the cumulative effect of change orders materially alters the character of the work from what was originally bid, the Awarding Authority should consider whether re-bidding is required.

12.6 Anti-Assignment. Assignment requires prior written consent per the Master Agreement. Assignment of payment rights to a commercial lending institution is permitted unless expressly prohibited.

12.7 Interest Rates Summary.

Section 13 — Governing Law and Forum

13.1 This Change Order is governed by the laws of the State of Alabama.

13.2 Exclusive jurisdiction and venue shall be in the Circuit Court of [________________________________] County, Alabama, or the United States District Court for the [________________________________] District of Alabama.

13.3 Disputes shall be resolved per the Master Agreement.

Section 14 — Execution

This Change Order is effective as of [__/__/____] upon execution by all required signatories.

OWNER / AWARDING AUTHORITY:

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONTRACTOR:

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
AL General Contractor License No.: [________________________________]
Date: [__/__/____]

ARCHITECT / ENGINEER (if required):

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
AL License No.: [________________________________]
Date: [__/__/____]

LEGAL COUNSEL (if 10% threshold exceeded — public works):

Signature: _________________________________________
Printed Name: [________________________________]
Title: [________________________________]
Bar No.: [________________________________]
Date: [__/__/____]

Exhibit A — Cost Breakdown Worksheet

Exhibit B — Revised Schedule

☐ Updated CPM schedule attached as Exhibit B-1

Exhibit C — Scope Change Details

Narrative:

[________________________________]
[________________________________]
[________________________________]

Revised Drawings:

Revised Specifications:

This template is provided for informational purposes only and does not constitute legal advice. Alabama law regarding construction change orders, prompt payment, mechanic's liens, payment bonds, contractor licensing, and the public works competitive bid law is complex and subject to change. Have this document reviewed by an Alabama-licensed attorney before use.