Subcontractors are not obliged to proceed with any additional work on a project based on a verbal directive alone from the general contractor or owner, rather than a signed, written directive, also known as a change order. That is a “foundational principle,” said lawyer George E. Pallas, managing partner of Cohen Seglias Pallas Greenhall & Furman PC.
Pallas, also assistant general counsel for the American Institute of Steel Construction, offered his advice on change orders as one of the first presenters at AISC’s NASCC—The Virtual Steel Conference, being held online April 21-24. In response to COVID-19, AISC is holding the webinar-like conference instead of the annual conference originally planned for Atlanta April 22-24.
Advice to Subcontractors
The advice to subcontractors, when seeking extra compensation for work outside a job’s original scope and budget, is to create a paper or email trail, says Pallas.
If a general contractor or owner won’t provide a written directive to perform the change, the best course is to send a change order request in the form of an email confirming the date, time and nature of the verbal directive. It is also important to state the intention to proceed on a certain date, in case there is no reply to the email. Absent a written and signed change order, a change order request is the best practice to avoid taking on the risk of not getting paid extra, said Pallas.
The general contractor or owner will either write back confirming or objecting or do nothing. “Silence from the general contractor or owner is likely viewed by the court as acceptance,” says Pallas. Under no circumstance should a subcontractor refuse to continue to work if there is no signed written directive, he adds.
AISC cancelled the Atlanta gathering on March 15 and returned all registration fees. At that time, registration was at 3,057. AISC estimated the in-person conference would have resulted in 600 to 1,000 more attendees than AISC conference in St. Louis last year, which had more than 5,100 registrants.
Free Professional Development
The online conference, a series of livestreamed and concurrent webinars, is free for all to attend. The concurrent sessions, which are livestreamed three or four at a time, offer free professional development credits. However, AISC is asking for support for the conference from those who can afford it.
"Registration for the virtual conference was not what we anticipated," says Scott Melnick, an AISC senior vice president. “We were expecting about 1,000 attendees and as of this morning, we're over 7,150.”
Livestreaming sessions is not new to AISC. Normally, at in-person events, the group streams two sessions during each time slot, for a total of 26. About 1,200 people attend “real” conferences virtually.
AISC has not made any changes to its plan for the 2021 conference, scheduled to be in Louisville, Ky., April 14-16. “It'll be interesting to see what the impact of the cancellation, as well as people's reaction to the pandemic, will be on next year's conference,” says Melnick.