Allowances - A201 § 3.8.2.3

Building Section Vignette and Multiple Choice

Allowances - A201 § 3.8.2.3

Postby remy » Sun Nov 17, 2013 8:45 pm

§ 3.8.2 Unless otherwise provided in the Contract Documents,
.1 allowances shall cover the cost to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade discounts;
.2 Contractor’s costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for
stated allowance amounts shall be included in the Contract Sum but not in the allowance; and
.3 whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Section 3.8.2.1 and (2) changes in Contractor’s costs under Section 3.8.2.2.

I understand the meaning behind .1 and .2, but I feel confused over the second half of .3
Why would the Change Order include "changes in the contractor's cost" if it already stated that unloading, handling, labor, installation etc should be provided for in the Contract Sum?
remy
 
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Re: Allowances - A201 § 3.8.2.3

Postby dancan » Mon Nov 18, 2013 5:59 am

Remy,

The actual cost of work may be more or less than the allowance assigned for the work for any number of reasons including cost of materials, quality of construction, time frame to complete the work, not just the items listed in paragraph 2. By nature of an allowance, the GC is making assumptions for unknowns in a project and an allowance is one way that he/she tries to assign a dollar amount to the unknown work. Sometimes these assumptions are wrong when additional information becomes available and paragraph 3 tries to make this right for the contractor (if cost is more) or the owner (is cost is less).

That's how I see it.
dancan
 
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Joined: Wed Oct 30, 2013 4:57 am


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