What is a change order and how do I request one?

Change orders are the proper method for requesting the following changes to an existing purchase order:

• Increase/decrease the value of a PO
• Modify the Open Commitment of a PO
• Change the distribution of funds between ChartFields associated with a PO and establishment of new ChartFields associated with a PO
• Close a PO
• Reconcile PO value to payment
• Change contract dates
• Change ship-to or bill-to information

There is an allowable tolerance for the total payment amount to be greater than the total purchase order amount.  This variance allows for items such as shipping charges and small incidental fees that may not have been anticipated when the PO was originally created.  Above these thresholds, however, a change order is required to increase the value of the original PO. When entering a payment, the system will indicate if the payment is within tolerance and processing can continue. If the payment is not within tolerance, ARC will not allow payment processing to continue. This tolerance level does not apply to (and is not limited to):

• Leasing
• Catering (on-site)
• Maintenance and repair services

View Tolerance Threshold Levels

Financial Change Orders

A financial change order is a change order that does not alter the scope or terms of the PO, such as updating a ChartField or distribution.  A financial change order bypasses approval by CU Purchasing and is reflected on the unit’s financial reports in ARC.

Note: Change requests to a scope of work, services, contract end-date, and supplier name must be completed through the initiation of a new purchase requisition

Responsibilities

• Requestor of the Change Order
  Initiates change order by submitting documentation to SPS-Finance, providing explanation and required supporting documentation to articulate rationale for the transaction.
• Department Approver
  Approves the validity of the change order request in ARC, both from operational and financial criteria; and verifies that supporting documents provide sufficient detail
• Central Purchasing Approver
  Reviews the original purchase order and validates that the requested change is in compliance with the terms of the original purchase order, and that supporting document(s) are sufficient; approve the change order request; convert the change order request to an updated purchase order.

To Request a Change Order

1. Provide a quote/proposal/order form from the vendor outlining the additional items/services requested. This document should address the additional items, hours, dollar amount to be added to the existing Purchase Order.
2. Submit a completed and signed Service Provider Amendment (attached). This form will outline and formalize the amendment to the purchase order contract.
3. Submit a Change Order Justification Memo (attached). This memo should provide the business purpose and justification for the change order request. It should address the original need for the goods/service and further explain the need for additional good/services. A sample of this memo can be provided upon request from SPS-Finance.