Construction change order guide
Understanding change orders, their types, documentation requirements, and how to manage them effectively.
What is a Change Order?
A change order is a written agreement to modify the original construction contract. It adjusts the scope, cost, and/or schedule of the project. Change orders are legally binding amendments that must be agreed upon by both the owner and contractor.
- • Description of the changed work
- • Reason for the change
- • Cost impact (increase or decrease)
- • Schedule impact (days added or removed)
- • Signatures from authorized parties
Types of Change Documents
A question about the contract documents. Does not change the contract, but the answer may lead to a change.
Owner-directed change when price/time agreement hasn't been reached. Work proceeds while negotiation continues.
Contractor-initiated notice of a potential change. Documents the issue and estimated impact before formal pricing.
The formal, signed amendment to the contract. Includes agreed-upon cost, schedule, and scope changes.
Minor clarification or change that doesn't affect cost or schedule. If cost/time is impacted, becomes a change order.
Common Causes of Change Orders
- • Scope additions or deletions
- • Material upgrades
- • Schedule acceleration
- • User requirement changes
- • Drawing errors or omissions
- • Coordination conflicts
- • Code compliance issues
- • Specification conflicts
- • Unforeseen conditions
- • Existing conditions differ
- • Utility conflicts
- • Soil/groundwater issues
- • Code changes during construction
- • Permit requirements
- • Material unavailability
- • Labor disputes
The Change Order Process
Identify the Change
Document what changed, why, and who requested it. Reference RFIs, ASIs, or field conditions.
Quantify the Impact
Prepare detailed cost breakdown and schedule analysis. Include labor, materials, equipment, overhead, and profit.
Submit Pricing
Formal proposal with backup documentation. Include quotes, labor rates, and productivity assumptions.
Negotiate
Review and negotiate terms. Owner may request additional backup or value engineering.
Execute
Sign change order and incorporate into project budget and schedule. Update contract sum.
Track
Monitor change order work separately. Document actual costs vs. estimated for future reference.
Change Order Pricing Methods
| Method | Description | Best For |
|---|---|---|
| Lump Sum | Fixed price for defined scope | Clear, well-defined changes |
| Unit Price | Rate × quantity | Repetitive work, unknown quantities |
| Time & Materials | Actual costs + markup | Emergency work, unknown scope |
| Not-to-Exceed | T&M with cap | Uncertain scope with budget limit |
Reducing Change Orders
The best change order is the one you prevent:
- Thorough preconstruction review, Catch coordination issues before construction starts
- Clear specifications, Reduce ambiguity that leads to disputes
- Owner decision deadlines, Prevent late changes that cost more
- Regular coordination meetings, Catch conflicts early
- Accurate existing condition surveys, Know what you're working with
Keep exploring
Related references and guides for change order management and RFIs.