These used to called CIS, CE or X-letters
The standard document used to notify an Owner of a potential change is a NOC-Letter. NOC letters are used for all changes on all projects. Review your Contract, which will have specific wording on the notification procedure. Even if your contract does not require a NOC letter it is good practice to use them so that the owner is always informed of a change. A NOC-Letter also transmits a preliminary estimate of the cost, or the savings, of a change and is used to receive direction from the owner as to how we are to proceed.
There are two basic types of NOC letters, one is used for quantifiable changes and the other is used for Time and Material changes. When a T&M NOC letter is issued it will be followed by the issuing of a PCO Directive to the subcontractor.
NOC letters are typically created and issued by the Project Engineer, however, when T&M NOC letters are used it may be prudent for the Superintendent to create and issue these documents. NOC letters are created in Prolog from the PCO using PM writer documents.
NOTE: If the Superintendent is going to be creating PCOs and/or NOC letters it is critical that they fully understand the “Detailed Cost Information” tab in Prolog to insure that the budget is not incorrectly affected.
NOC-Letters should be clear, concise and indicate the information upon which the estimate is based. It should also emphasize that the estimate is approximate and, therefore, subject to change upon the receipt of more definite information. NOC-Letters must also include a statement as to whether or not the change will effect work that is already being performed and indicate what if any limitations on the change exist. For example, if a change indicates raising a ceiling in an area where ductwork has already been released for fabrication, the owner should be made aware of this and where possible the cost or schedule ramifications should be noted on the letter.
Prepare an estimate for the NOC-Letter indicating the cost of the change and schedule impact. The estimate should establish the magnitude of the change and you should make your Owner aware that it is only an order of magnitude estimate. The Owner must understand that a detail estimate is not being performed, at this stage, for every change. The preliminary estimate ideally should be broken down by trade, summed up and include all applicable charges such as, Subguard, CCIP, GCs and Fees. NOC-Letters should be prepared as soon after the receipt of a change as possible.
Multiple signature blocks are included on the NOC letters to allow the owner to acknowledge acceptance and give specific direction as to how we are to proceed. The options are Proceed while Pricing, Price Only or Do Not Proceed.
If the NOC letter is returned signed Proceed while Pricing and general contractor then directs the subs to proceed using a RFP – Proceed while Pricing the right side cost of the PCO should be allocated as Pending, which will insure that the costs are included as committed on the IOR budget reports. It will be necessary to review your contract to verify if this form of approval will eliminate the risk for general contractor, as it is usually contractually necessary for a Change Order Request or general contractor Change Order be issued and signed before we can direct subcontractors to work without being financially at risk.