In the normal course of business, our clients often direct us to perform activities
that we consider to be outside of the contractual scope of work and/ or which we
believe have schedule and/ or cost impacts to the project. Other factors or events
not directly caused by our client which are beyond the limits of risk assigned to
the contractor may also influence the schedule and cost performance of a project.
Clients must be notified of both of these types of events.
It is the responsibility of the project team to recognize these directives as being
outside of the project scope, to serve timely written/ formal notice to the customer
regarding the cost and schedule impacts and to collect any entitlement. Some contracts
require Company to proceed with such work, upon receipt of written directives from
the Client prior to the issuance of a formal Client Change Order (CCO). In most cases
one should not undertake what is considered to be out of scope work without prior
written agreement on the cost and schedule impacts or without receipt of a written
Execution of out of scope work without a properly executed Client Change Order may
result in the creation of a claim situation between Company and the Customer. Proactive
planning and execution of Client Change Orders provides the greatest opportunity
for Company to protect its financial position and to avoid a claim situation. This
procedure outlines the expectations for actions to be taken by the Project Manager
and Project Teams to avoid a claim situation and to be successful in developing and
executing a Claim Strategy when disputes or Client actions may result in significant
adverse financial impact to Company.