Change Order Definition
A Change Order is an amendment to a construction contract that alters the original terms and conditions agreed upon by the project owner and the contractor. This document specifies changes to the scope of work, project timeline, or contract price. Change orders are necessary when unforeseen circumstances arise, new requirements are identified, or adjustments are needed to complete the project successfully.
About Change Orders
Change orders serve as an official record of changes made to a project contract. They help ensure that all modifications are agreed upon by both the project owner and the contractor. This process helps maintain transparency and accountability, preventing disputes and misunderstandings.
Change orders typically include a detailed description of the change, the reason for the change, the impact on the project’s cost and schedule, and signatures from both parties indicating their agreement.
Check out our construction change order guide to understand its process, key elements, and best practices for smooth project management.
Change Order vs. Change Request
A change order in construction is a formal contract modification that legally updates the project's scope, cost, or timeline after work has started. A change request, however, is a proposal for a change that needs approval before it becomes a change order. While both deal with project changes, they differ in process, approval, and impact.
| Aspect |
Change Order |
Change Request |
| Definition |
A legal contract modification that updates work, cost, or schedule |
A request for a change that needs approval before becoming official |
| Timing |
Happens after the contract is signed and work has begun |
Happens before approval, often during planning or execution |
| Approval |
Requires signatures from the owner, contractor, and architect/engineer |
Reviewed internally before approval or rejection |
| Impact |
Directly affects contract terms, budget, and schedule |
May not always lead to a change order |
| Documentation |
Must be recorded in writing as part of the contract |
May be informal or documented for review |
For example: A project owner wants to add more windows to a building. They submit a change request to the contractor, who reviews the cost and timeline impact. If approved, the change request becomes a change order, which legally updates the contract, ensuring payment and compliance.
When to Use a Change Order
A change order is needed whenever the scope, budget, or schedule needs adjustments after work has started. It ensures all modifications are documented, approved, and legally binding.
- Scope Changes: Used when adding new features, removing tasks, or altering project requirements.
- Budget Adjustments: Needed when cost changes arise due to scope modifications or unexpected expenses.
- Schedule Modifications: Required when project timelines shift due to delays, accelerations, or priority changes.
- Unforeseen Conditions: Issued when unexpected site issues, material shortages, or other challenges impact the original plan.
Using change orders ensures that every adjustment is properly reviewed, approved, and recorded, helping teams maintain project control and avoid disputes.
How Mastt Helps with Change Orders
Mastt provides a comprehensive platform that supports the efficient management of change orders in construction and capital projects. Here’s how Mastt can assist:
- Centralized Dashboard: Mastt's dashboard offers a centralized view of contract details, project progress, and financial status, helping project managers track and manage lump sum contracts effectively.
- Cost Management Tools: The platform provides tools for accurate budgeting, change orders and financial tracking, ensuring that the project stays within the agreed price.
- Change Order & Request Management: Mastt facilitates the management of change orders by documenting changes, tracking their impact on the contract price and timeline, and ensuring approval from all parties.
- Stakeholder Communication: Mastt enhances communication between the project owner, contractors, and other stakeholders, ensuring transparency and collaboration throughout the project lifecycle.
- Budget, Contarct & Payment Management: Mastt helps manage accurate project budgets and contracts with reliable data. Mastt allows its projects to see in real time how your project, program or portfolio is tracking across commitments, cash flow and more.
- Risk Management: By offering robust risk management tools, Mastt enables identification and mitigation of risks early, ensuring projects stay on track.
Change Order Reporting Dashboard Example
By leveraging Mastt, Project Owners and Project Managers can enhance decision making, leading to more efficient project execution, increased quality and more successful outcomes.
Mastt showing Change Order against a General Contractor Contract
