Construction Program Guide

Contract Changes

The FHWA's policies for construction contract modifications provide for the use of standardized changed condition clauses for certain projects and for the review and approval of contract modifications for Federal-aid participation.

Authority/Legal Basis

1. Laws

   • Title 23 U.S.C. 315 provides very broad authority for the Secretary of Transportation to prescribe regulations to carry out the Federal-aid highway program. However, there are no specific statutes dealing with construction contract modifications.

2. Regulations

   • Title 23 C.F.R. 635.102 - Definitions
   • Title 23 C.F.R. 635.109 - Standardized changed condition clauses prescribes the standardized contract clauses mandated by the 1987 Surface Transportation and Uniform Relocation Assistance Act. These contract clauses include the following:
     • Differing Site Conditions,
     • Suspensions of work ordered by the engineer, and
     • Significant changes in the character of work
   • Title 23 C.F.R. 635.120 - Changes and extra work describes the FHWA approval procedures for the review and approval of change orders and extra work.
   • Title 23 C.F.R. 635.121 - Contract Time and contract time extensions describes the FHWA approval procedures for the review and approval of time extensions.
   • Title 23 C.F.R. 635.109(c) address the unique use of changed condition clauses for design-build contracts. The FHWA encourages but does not require the use of such clauses in design-build contracts.

   The above regulations provide the FHWA's regulatory policy regarding construction contract modifications. However, please note that these regulations were last updated on August 2, 1991 and do not include revised stewardship, oversight, and applicability requirements resulting from the 1991 ISTEA and the 1998 TEA-21. See the discussion in the FHWA Contract Administration Core Curriculum Manual for a summary of current FHWA policy).

3. Orders

   • None

4. Policy

   • The FHWA Contract Administration Core Curriculum Manual summarizes policy and provides general guidance concerning contract modifications. Please refer to the following sections of the manual for more specific guidance:
     • Standardized Changed Condition Contract Clauses
     • Change Orders (Extra Work and Time Extensions)

   • Policy Memoranda

     • Headquarters memorandum dated July 12, 1963, Subject: Participation in Engineering Errors provides guidance for FHWA's participation in change orders where carelessness, negligence, incompetence or under-staffing are not contributing factors.
     • Headquarters memorandum dated September 8, 1978, Subject: Participation in the Cost of Corrective Work Resulting from Construction Engineering Errors provides guidance for FHWA's participation in the cost of consultant design errors that are not the result of carelessness or gross negligence.
     • FHWA Policy Letter dated November 15, 1996 provides general guidance concerning the eligibility of cardinal changes which provide significant changes in the scope of the work.
     • FHWA Policy Memo dated September 18, 1990 provides general guidance concerning the eligibility acceleration costs when the original contract does not have an incentive / disincentive provision.

Guidance

1. General Information

   • FHWA Contract Administration Core Curriculum Manual (see "Policy" above)
   • FHWA Form 1365 - Record of Authorization to Proceed with Major Contract Provision is a form that can be used to document the FHWA's advanced approval of change orders.
   • Transmittal of Geotechnical Engineering Notebook Issuance GT-15, Geotechnical Differing Site Conditions, May 2, 1996 (.pdf, 100 kb) provides guidance on the use of differing site condition clauses for geotechnical applications.
   • FHWA Non-Regulatory Supplement to 23 CFR Part 635 - #5 Changes and Extra Work; and # 7 - Contract Time and Contract Time Extensions

2. Training

   • FHWA Contract Administration Core Curriculum (Course Description)