3.3.6.1 General

3.3.6.1 General. 1. In the event a determination is made by a loan recipient after a construction contract is let that changes or modifications to the original contract are necessary or would better serve the purpose of the loan recipient, such loan recipient may, in its discretion, execute such change orders pertaining to the construction that are necessary under the circumstances, as provided in the contract documents and when in accordance with state purchasing law. 2. Change orders must not change, vary, or alter the basic purpose or effect of the project unless allowed by the Department. Change orders must be technically adequate, the costs and time extensions must be necessary and reasonable, and eligible/ineligible costs must be appropriately separated. 3.3.6.2 Change Order Submittals. 1. After completion of the claims resolution and/or change order negotiation process between the Loan Recipient and the contracting party, a fully executed change order must be submitted to the Department staff for review and approval, in order to obtain a DWSELF loan eligibility/allowability determination. 2. If any change order is submitted to the Department that is not complete and fully executed by the Loan Recipient, the contracting party, and the registered engineer if appropriate, the Department may return such change order without review. However, unilateral change orders executed by the Loan Recipient, and the registered engineer if appropriate, and identified as such, that are issued in accordance with the contract documents may be submitted to the Department for review and approval, in order to obtain a DWSELF loan eligibility/allowability determination. 3. The Loan Recipient may submit a complete and fully executed change order which has been executed conditional upon a DWSELF loan eligibility/allowability determination by the Department. 4. All change orders must be submitted to the Department for review and approval in a timely manner. 5. If possible, approval of a change order should be secured from the Department before the work is started, particularly for change orders requesting time extensions as per Section III.C.(6)(e) below. Approval may also be secured after the work is started; however, the loan recipient must bear the cost if the work is determined to be ineligible or unallowable. The Department may withhold payments to the loan recipient if change orders are not submitted in a timely manner. 6. When the eligible cost of a project will be significantly reduced by a change order or change orders, the Department may issue an amendment to the loan agreement decreasing the loan amount, and the loan recipient must execute such amendment within the time frame established by the Department. 3.3.6.3 Technical Review. In order to allow the Department to perform a technical review, requests for change order approvals must contain: 1. A completed change order form. 2. A clear and complete description of the change. 3. A justification of the need for the change. 4. Revised plans, specifications, and contract documents, as needed. 5. Engineering computations and sketches, as needed. 6. Clear site certificates for any new real property or easements that may be required. 7. Any other permits or approvals that may be required. 3.3.6.4 Eligibility Review. In order to allow the Department to perform an eligibility review, requests for change order approvals must contain: 1. a separation of all items into eligible and ineligible categories 2. for change orders which alter an existing unit price or which add new related items of work costing more than $10,000, exclusive of freight and shipping charges, the contractor's cost and/or pricing data and the engineer's analysis of the contractor's data. 3. Change orders which increase or decrease the quantities of items in the contract with no change in the unit price or which add new related items of work costing $10,000 or less, exclusive of freight and shipping charges, need not include the contractor's cost and/or pricing data or the engineer's analysis of the contractor's data. 3.3.6.5 Time Extensions. 1. Change orders which include time extensions must be submitted to the Department no later than ten (10) days after the current contract completion date, as specified in Section III.C.(9)(d) of this regulation. Justification for contract time extensions included in a change order must be prepared, but need not be submitted to the Department unless the total time extensions for the contract exceed 25% of the original contract time, in which case justification for all time extensions must be submitted to the Department for review and approval. 2. Construction and construction related work which occurs after the date representing a 25% time extension to the original contract time are allowable only to the extent approved by the Department pursuant to review of the justification for all time extension change orders. Construction and construction related work which occurs after the date representing a 25% time extension to the original contract time, and for which a time extension change order cannot be adequately justified by the loan recipient and approved by the Department, are not allowable unless the Department determines that the loan recipient is implementing all legal remedies provided in the contract documents for failure to complete construction when required.