If companies are on the ball, cost of change orders are added to the contract when they occur, not down the road. You don't start work without a approved change order, and to do so is putting the company in a bad spot for getting paid. You bill for those change orders as you do the work. I remember doing a job review on a project to see what changes took place and what extra cost was incurred, but not bill. The owner was taken back when I told him that he hadn't bill an extra 25% of the original contract in the first place for these changes.
That's right. Change orders are issued as the job goes, and billed as you go. You wouldn't do out-of-scope work before receiving the agreement (which is what a change order is, an agreement) between contractor and owner to alter the scope (and with it, price and/or schedule) of the original contract. Your guarantor/surety also needs to sign off on it, as they provide guaranty for your bond, and it originally only applies to the original contract amount. Otherwise your performance bond won't cover any additions.
Making a change order after the fact is simply stupid. It would mean that owners could hold contractors hostage for money, as the work has already been completed, and no agreement was in place for that work. On most projects these days, I typically see change orders before we even start in the field, and continuing throughout the entire job. When you hear about "cost overruns" in the news, what they are actually talking about are change orders.
Damages are calculated near the end of the job, as you typically don't incur damages until the contract completion date has come and gone and you haven't met substantial completion.
The TTC cannot start legal proceedings against Bombardier until they actually fail to meet some sort of contractual obligation, which they likely haven't done. If the TTC feels that Bombardier's performance is jeopardizing the overall schedule and contract completion, then what they can do is put Bombardier on notice. They would send them a letter, saying that their in-house delays are worrying, and that they delayng TTC's fleet rollout, and that they might be on the hook for overhaul costs to extend the life of the existing fleet due to lack of new fleet delivery. Not doing so typically weakens your case during the claims process, as in cases of obvious performance issues, you should be doing your due diligence and informing your contractor that they aren't working to your expectations. Judging by the comments of Andy Byford in the news, it sounds like this has probably already happened, or is about to happen.
