In March 2024, Governor Inslee signed SSB 6192 into law. This amended RCW 39.04.360 to require timely execution of change orders on both public and private construction projects. The amended language, which went into effect on June 6, expands the existing law to require all project owners to issue change orders within 30 days or face having to pay interest and attorney fees. The previous version of the statute applied only to the State and municipalities for public works projects, and required issuance of change orders of any amounts not in dispute within 30 days “after satisfactory completion of additional work or portion of any additional work by a contractor,” or the State or municipality would have to pay interest at 1% per month.

The new law expands these change order protections to private projects, subcontractors, and suppliers, and provides timeframes for owners, contractors, and subcontractors to submit and authorize undisputed change orders for work that has been satisfactorily completed. The following summarizes changes to the law:

• The biggest change is the requirement for timely execution of change orders on public works projects to apply to private construction, save for private residential projects under 12 units. Notably, the amended law falls under Washington public contracting code but expressly applies to private projects.
• Of interest to general contractors is that subcontractors and material suppliers are now covered so that for any additional work by a contractor, subcontractor, or material supplier that is not in dispute, a change order must be issued within 30 days after receipt from the contractor for issuance of a change order.
• Within 30 days of satisfactory completion of any “authorized additional work,” the contractor, subcontractor, or material supplier must request a change order from the project owner or upper-tier contractor.
• If the request is made by a subcontractor or material supplier, the upper-tier contractor must request a change order within 30 days of satisfactory completion of any authorized additional work and a request by a subcontractor or supplier.
• The owner (including the State and municipalities) then has 10 days to issue the change order to the contractor, subcontractor, or lower-tier subcontractor impacted by the change.
• If the owner, contractor, or subcontractor fails to issue the change order within 10 days, it must pay the proportionate share of any interest owed for the non-issuance of a change order.
• A contractor or upper-tier subcontractor is not liable for any interest on the unpaid dollar amount for any additional work completed, if it makes the request within 30 days but a change order has not been issued.
• The law provides that it “does not provide any rights to a contractor, subcontractor, or supplier against a party with whom they are not a party to a written contract.”
• The law further provides that “[a]n aggrieved party may bring a civil action for violations of the change order requirements in a court of competent jurisdiction for appropriate relief including interest and reasonable attorneys’ fees and costs.”

The intent of the law is to protect contractors, subcontractors, and material suppliers from financing undisputed changes to projects. Notwithstanding, questions remain with regard to the implications of the new law that will likely require interpretation by a court or the legislature (i.e., when is a change order in dispute?). There may also be contractors who are unaware of the change in the law, since it falls under the provisions of the public contracting code, and they may unknowingly (and unintentionally) be subject to interest and attorney fees if they fail to comply with the timeframes. Any company (or municipality) that has questions regarding the new change order requirement should consult with an experienced construction lawyer.

The full text of the 2024 version of RCW 39.04.360 provides as follows:

(1) No later than 30 days after satisfactory completion of any additional work or portion of any additional work by a contractor, subcontractor, or supplier on a public works project or private construction project, except private residential projects of 12 units or less, and receipt by the owner, state, or municipality of a request from the contractor for issuance of a change order to the contract, the owner, state, or municipality shall issue a change order to the contract for the full dollar amount of the work not in dispute to the contractor. Within 10 days of receipt of a change order from the owner, state, municipality, or upper-tier contractor, the contractor or subcontractor must issue change orders to lower-tier subcontractors impacted by the change. If the owner, state, or municipality does not issue such a change order within the 30 days, or the contractor or upper-tier subcontractor does not issue a change order to lower-tier subcontractors within 10 days after receipt of the approved change order, interest must accrue on the dollar amount of the additional work satisfactorily completed and not in dispute until a change order is issued. The owner, contractor, subcontractor, state, or municipality shall pay their proportionate share of the interest at a rate of one percent per month. For the purposes of this section, as it pertains to obligations of an owner, state, or municipality, additional work is work beyond the scope defined in the contract between the contractor and the owner, state, or municipality.

(2) No later than 30 days after satisfactory completion of any additional work or portion of any additional work authorized by the owner, state, or municipality and a request by a subcontractor or supplier, the contractor must request a change order from the owner, state, or municipality. A lower-tier subcontractor or supplier must request a change order from the upper-tier contractor 30 days after the completion of the additional work and a request from the lower-tier subcontractor. If a contractor or subcontractor has requested the change order from the owner, upper-tier contractor, state, or municipality within 30 days of the request from the subcontractor or supplier, the contractor or subcontractor is not liable for any interest on the unpaid dollar amount for any additional work satisfactorily completed and not in dispute if the owner, upper-tier contractor, state, or municipality has not issued the requested change order. This section does not provide any rights to a contractor, subcontractor, or supplier against a party with whom they are not a party to a written contract.

(3) An aggrieved party may bring a civil action for violations of this section in a court of competent jurisdiction for appropriate relief, including interest and reasonable attorneys’ fees and costs.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.