Owner scope change or design gap: the same duct conflict, two different bills
A mechanical contractor finds that a supply duct shown on the drawings runs straight through a steel beam. The duct has to move. Someone will pay for the reroute. On a CM at risk project, the label attached to that PCO decides who.
Call it owner scope and the owner pays from owner contingency, with no recourse. Call it design gap and the owner still pays the contractor today, but the record now points at the design team. Two labels, two very different bills over the life of the project.
What makes a change owner scope
Owner scope means the owner changed the program after the GMP was set. The contractor priced a building. The owner now wants a slightly different building. Under most AIA A133 based agreements the contractor is entitled to a change order for the cost plus fee, and the GMP goes up.
The test is whether the work would have been needed had the owner said nothing. If the owner moved a mechanical room, added a lab hood, or asked for a different ceiling height, the duct conflict is a consequence of an owner decision. That is owner scope, and the owner should record it as such without argument.
What makes a change a design gap
A design gap means the documents did not describe a building that could be built as drawn. The duct and the beam were both on the drawings, in the same place, and nobody resolved it before the GMP. The owner did not ask for anything new. The work is still needed, and the contractor still gets paid for it.
The difference is where the record points. The architect carries professional liability insurance for a reason. Whether the owner ever pursues recovery is a separate decision, and often a commercial one. But that decision can only be made if the owner's register shows, change by change, how much the design gaps added up to. An owner who labels every gap as owner scope has already given that number away.
The questions that separate the two
When a PCO arrives, the owner or owner's representative should be able to answer four questions before agreeing to a cause.
Was the conflict visible in the GMP documents?
Pull the drawing set the GMP was based on, not the current set. If the duct and the beam were both there and both in the same place, the conflict existed at GMP. That leans toward design gap, or toward coordination if the contractor's scope included clash detection.
Did the owner issue a direction after the GMP?
Look for an owner letter, a meeting minute, or a bulletin that changed the layout. If one exists and it moved the duct or the beam, the cause is owner scope. If none exists, keep looking.
Did the design team issue a revision without owner direction?
Architects issue clarifications and revised sheets throughout construction. A revision that moved a beam without the owner asking for it is a design change, not an owner change. Record it as design gap.
Would a reasonable contractor have caught it?
Check your contract for the contractor's review and coordination obligations. Many CM at risk agreements require the contractor to review documents for conflicts before setting the GMP. If this one was obvious, the cause may be coordination and the cost may belong in contractor contingency.
A fictional example with numbers
Picture a fictional $61 million research building. Over eighteen months the owner's register shows 142 change orders. Ninety of them are small, under $10,000, and almost all of them involve ducts, pipes, conduit and steel meeting in places the drawings did not anticipate.
If each one is recorded as owner scope, the owner's contingency absorbs roughly $1.4 million and the record says the owner changed its mind ninety times. If each one is tested and sixty are recorded as design gap, the owner still pays the contractor, but the register now shows a pattern worth a conversation with the architect's carrier. Nothing about the construction changed. Only the label did.
This is the kind of register Costwitness keeps on the owner's side. Each change carries a cause, the cause can be challenged and changed, and every change to the cause is logged. The software does not decide which label is right. It makes sure the owner decided, and shows the total by cause whenever someone asks.
Three things to do before the next pay application
- Locate the exact drawing set and specification date the GMP amendment references, and keep a copy you can open in a meeting.
- For every open PCO, write down which of the four questions above you can answer and which you cannot.
- Ask the design team to confirm, in writing, which revisions since GMP were owner directed and which were their own corrections.
Questions on this
Does labeling a change as design gap mean the architect pays?
No. The contractor is paid by the owner either way. The label records where the cause sits so that recovery can be considered later. Whether recovery is pursued depends on the design agreement, the amounts involved, and the owner's relationship with the architect.
What if the contractor and owner disagree on the cause?
Record both positions. The owner's register should hold the owner's cause and a note of the contractor's proposed cause. The change order can still be executed so the work proceeds. The disagreement is preserved for closeout or for any later claim.
In the product
Change order register, Contingency ledger, Anticipated final cost. Free tool: Change Order Exposure.
Keep reading
Earlier: Unclassified change orders and the thirty day rule. Later: Cause classification: owner scope, design gap, unforeseen, coordination. All articles on change orders.
See the cause register on a project like yours.
Thirty minutes on a call. The change order register with causes, the audit trail, and the notice clock, on a fictional project.