Guide to Change Orders in Construction Projects

No matter how well a project is planned, something always shifts: scope, cost, timeline, or all three. When that happens, a change order is the official way to update the contract and keep the project moving.

But managing change orders isn’t just about paperwork. It affects your budget, your schedule, and your team’s time. If you get it wrong, things can snowball fast. That’s why knowing how change orders work and how to stay on top of them is essential.

What is a Change Order?

A change order is a written agreement that updates the original construction contract. It lets you change the contractor’s scope of work, the price, the timeline, or all three. For the change to be valid, both the owner and contractor must agree in writing.

Most change orders involve extra work. Think adding a window, moving a wall, or upgrading finishes. These are called additive change orders. Others remove work to save time or money. Those are deductive.

Either way, change orders exist because no project goes exactly as planned. When conditions shift or designs evolve, change orders help you adjust without derailing the job.

What’s the Purpose of a Change Order in Construction

The purpose of a change order goes beyond updating a contract. It’s a critical tool for maintaining alignment, clarity, and legal protection on a construction project. Change orders:

• Provide a written record of agreed-upon changes to scope, time, or budget
• Protect all parties by documenting approvals
• Prevent misunderstandings or disputes about what was or wasn’t included
• Ensure compliance with contract procedures and legal standards
• Create a clear audit trail for billing, insurance, and project closeout

In short, a change order formalizes project flexibility while maintaining structure and accountability.

6 Types of Change Orders

Change orders aren’t one-size-fits-all. Some add work, others cut it. Some shift the schedule, while others just clarify what needs to be built.

Each one plays a different role, so it’s worth understanding how they work. That way, your team can respond faster and avoid surprises.

Here are the most common types:

1. Additive Change Orders: These add work to the original contract. That might mean installing extra lighting, upgrading materials, or adding a new room. They usually increase the project cost and extend the timeline.
2. Deductive Change Orders: These remove or omit work. Maybe the client decides to skip a feature to stay on budget, or a design element gets cut. These reduce both cost and scope.
3. Zero-Cost Change Orders: These change the scope without affecting cost or time. For example, swapping one type of material for another with equal value. The work is different, but the overall impact is neutral.
4. Time-Only Change Orders: These extend or shorten the project schedule without changing the cost. A delay in permitting or extreme weather might push the completion date, but not the budget.
5. Access-Related Change Orders: These happen when workers can’t reach parts of the site as planned. Maybe a shared driveway is blocked or a crane can’t be set up. The workaround creates extra effort or delays.
6. Value Engineering Change Orders: These substitute a different method or material to reduce cost without hurting quality. For example, using a more affordable HVAC system that still meets performance specs.

When Do You Need a Change Order?

You need a change order any time the agreed scope, price, or timeline of your project is going to change, especially if those changes happen after the contract has been signed. There are two common triggers:

1. Client-initiated changes: If the owner asks for something new or different—like adding features, changing finishes, or accelerating the schedule—a change order should be used to document the new agreement.
2. Contractor-discovered conditions: If you uncover unexpected conditions after work has begun—such as undocumented site issues, code changes, or design errors—a change order is necessary to adjust the scope and protect your position.

Who Can Initiate a Change Order?

Change orders can be initiated by either the project owner or the construction contractor, depending on who identifies the need for a change. In some cases, the architect or engineer also plays a key role in initiating or documenting the change. Each party may start the process through a different document or method, depending on the situation.

Here are the common ways change orders are initiated:

1. Proposal Request (PR): Initiated by the Owner or Architect

Typically issued by the architect, a proposal request asks the contractor to provide pricing and schedule implications for a requested change. It’s often used to explore options or address anticipated issues before authorizing work.

2. Architect’s Supplemental Instructions (ASI): Initiated by the Architect

An ASI provides additional details or minor changes to the contract documents. These are intended to have no impact on the contract price or timeline. If they do, a change order is required to formalize the adjustment.

3. Construction Change Directive (CCD): Initiated by the Owner

A CCD allows the owner to direct the contractor to proceed with changes immediately, even if there’s no agreement yet on cost or time. It’s a temporary step used when delays aren’t an option. A formal change order follows once terms are settled.

4. Request for Information (RFI): Initiated by the Contractor

When contract documents are unclear or inconsistent, the contractor may submit an RFI. If the clarification results in a scope change or method of work, a change order is created to document that impact.

5. Change Order Request (COR): Initiated by the Contractor

A COR is submitted by the contractor to propose a change in scope, cost, or schedule. It may be triggered by a PR, ASI, or CCD, or it can be initiated directly in response to site conditions, design conflicts, or material availability.

Common Reasons for Construction Change Orders

Here are the most common ones you’ll run into on a construction project.

1. Client-Requested Scope Changes

Clients often want to change or add features after construction has already started. This could be due to personal preference, new needs, or simply seeing the space and rethinking things. These changes usually go beyond what was originally agreed on in the contract.

Example: The client decides to add built-in benches and planter boxes in the outdoor area. This extra work wasn’t part of the original design or budget.

2. Design Changes and Errors

Plans aren’t always perfect. Sometimes there are gaps, conflicts between trades, or things that don’t quite work once construction begins. Other times, the design team updates the original plan to reflect new decisions or feedback.

Example: The interior designer updates the ceiling layout to improve acoustics in a shared office space. That change affects HVAC ducting, lighting, and sprinkler placement.

3. Unforeseen Conditions

These are problems you couldn’t have known about until work began. They often involve existing site conditions. Since they weren’t visible or documented, they weren’t included in the original scope.

Example: Excavation reveals a large buried concrete slab from a previous structure that wasn’t on any drawings. Removing it takes extra time and equipment.

4. Regulatory or Code Changes

Sometimes local authorities update rules mid-project. Even if the project was approved under older codes, new inspections may require updated work to meet the latest standards.

Example: New environmental regulations take effect, requiring upgraded insulation for energy efficiency. The team has to order new materials and revise installation methods.

5. Schedule Acceleration or Delays

The project timeline may shift due to client demands or issues like weather, delayed approvals, or coordination problems. Speeding up or adjusting the schedule usually means changing how or when work gets done, which affects cost and planning.

Example: A key tenant wants to move in early, so the owner asks the team to fast-track the interior fit-out. That requires night shifts, more workers, and rush delivery fees.

6. Material or Labor Shortages

Construction depends on the availability of materials and skilled labor. If suppliers fall through or trades are booked out, the team might need to make substitutions or rework the schedule.

Example: The specified acoustic panels are backordered for eight weeks. The team sources a similar product, but it needs different mounting hardware and changes to the framing.

2 Types of Contract-Level Change Orders

Not all change orders follow the same contract path. In large projects, there’s often a distinction between the change orders that affect the owner-contractor agreement and those that affect subcontractors.

1. Prime Contract Change Orders (PCCOs)

A Prime Contract Change Order (PCCO) is a formal change to the agreement between the project owner and the prime contractor (also called the general contractor). PCCOs are similar to standard change orders, but they apply specifically to the prime contract. This is the main contract that governs the overall project.

Like other change orders, PCCOs can:

• Add or remove work (additive or deductive)
• Increase or decrease the contract value
• Extend or shorten the project schedule
• Modify design elements, materials, or scope

Even though a PCCO affects only the owner–contractor agreement, the actual work often involves subcontractors. That’s where Commitment Change Orders come in.

2. Commitment Change Orders (CCOs)

A Commitment Change Order (CCO) adjusts the agreement between the prime contractor and a subcontractor. When a PCCO introduces new work—or removes work—the prime contractor may need to revise subcontractor agreements to reflect that change.

CCOs allow the prime contractor to:

• Align subcontractor commitments with the updated prime contract
• Add, remove, or modify the subcontractor’s scope of work
• Stay consistent with budget and schedule adjustments

In short:

• PCCOs change the contract between the owner and the prime contractor
• CCOs change the contracts between the prime contractor and their subcontractors

Both types of change orders keep the project aligned as changes are made, but they operate at different levels of the contract chain. When change orders start stacking up, having a clear process—and the right tools—makes all the difference.

How Standard Forms Handle Change Orders

Most U.S. construction projects follow standard contract formats that include clearly defined procedures for handling change orders. The most commonly used are the AIA contract documents and ConsensusDocs series, but other forms are also worth understanding.

• AIA A201-2017 (Article 7): Defines change orders as written agreements signed by the owner, contractor, and architect, covering changes in the work, contract sum, and contract time.
• ConsensusDocs 200 (Article 8): Offers a collaborative framework for handling change orders, construction change directives (CCDs), and other written modifications.
• EJCDC C-700 (Standard General Conditions of the Construction Contract): Developed by the Engineers Joint Contract Documents Committee, it includes detailed provisions in Articles 10 and 11 on contract modifications and change proposals.
• Federal Acquisition Regulation (FAR) Contracts: In government projects, FAR clauses—particularly FAR 43.2—govern contract modifications and require strict documentation, approval, and pricing procedures.
• DBIA Standard Form of Agreement (Document No. 535): In design-build contracts, this form provides a unified approach to change orders that affect both design and construction scope.

While each standard varies in structure and terminology, they generally require:

• Written documentation of all changes
• Timely approval from all impacted parties
• Detailed breakdowns of scope, cost, and time changes

Choosing the right form and following its procedures helps avoid disputes, improves transparency, and supports compliant project delivery.

How to Process a Change Order

A change order follows a structured process to ensure the adjustment is documented, reviewed, approved, and implemented correctly. Here’s how a typical construction change order moves from start to finish:

Step 1: Change Identified

A potential change order starts when someone on the project notices something needs to change. It might be a design issue, an owner request, a site condition, or a building code update.

This step can be triggered by anyone on the project. It could be the owner, architect, contractor, or consultant, as long as it clearly affects the contract’s scope, cost, or schedule.

Step 2: Formal Notification

Once a change is identified, it needs to be reported in writing. Most U.S. contracts (e.g. AIA A201, ConsensusDocs 200) require written notice within a specified period, sometimes within 7 or 14 days.

Notification can come through a Proposal Request, Construction Change Directive (CCD), or Change Order Request (COR). If this step is missed or delayed, the request might be denied later.

Step 3: Contract Review and Cost Assessment

After notice is given, review the contract, including general conditions, scope of work, and any change management provisions. Identify any clauses related to timelines for notice, documentation standards, and required forms (e.g., AIA G701, ConsensusDocs 202, or project-specific templates).

The contractor also reviews how the change affects the budget and timeline. This includes estimating material and labor costs, checking subcontractor quotes, and seeing if the change impacts the project schedule.

In federal projects, even more detailed backup is required. Everything must be documented so the owner can see exactly how the numbers were calculated.

Step 4: Approval or Rejection

Once the pricing and schedule impacts are submitted, the owner or contracting officer decides whether to approve the change.

A change order isn’t valid without written approval. Verbal authorizations are strongly discouraged and often unenforceable. Work cannot proceed until the order is signed by the authorized parties.

If the proposal looks fair and accurate, the change order is approved and becomes part of the contract. If not, it’s rejected or sent back for revision.

Step 5: Document the Change Order

When a change is approved, it must be officially recorded. All standard contracts in the U.S. mandate documentation of approved change orders.

Documentation includes the agreed scope, revised drawings/specs, and the updated cost and schedule. These documents become part of the project record and may be reviewed during closeout or audits.

Step 6: Implement the Change

Once approved, the change is reflected in the updated project schedule, subcontractor scopes, and budgets.

Projects often track these updates using software. Everyone involved should be informed so the change is properly integrated into the ongoing work.

Step 7: Payments and Records Are Adjusted

If the change affects the contract price, it also affects how payments are handled. This might involve a one-time payment, an adjustment to the next progress claim, or changes to the final invoice. The contract term should clearly explain how and when these adjustments are made.

Key Components of Construction Change Orders

Unless your contract says so, a change order doesn’t have to follow a specific format. Some contracts require forms like the AIA G701 or ConsensusDocs 202. If not, you can use any format that’s clear, complete, and easy to track.

Whether you’re filling out a template, writing it by hand, or building one in Excel, here are the core items every construction change order should include:

• Notice of Change Requirement (if applicable): Many U.S. contracts, including AIA and ConsensusDocs, require written notice before a change order can be submitted. This is often a formal notification that a change to the work may be needed due to site conditions, design changes, or other factors.
• Project Information: Includes the basic project details such as project name, location, client or owner name, and contractor information.
• Change Order Number: A unique identifier assigned to the change order for tracking purposes. This number should follow a consistent format throughout the project.
• Description of Change: A clear explanation of what work is being added, removed, or modified. This should align with any revised plans, standard specifications, or instructions.
• Reason for Change: The underlying cause of the change, such as a design change, site condition, client request, or regulatory requirement.
• Detailed Scope of Work: A breakdown of the tasks, trades, or materials involved in the change. This should be specific enough to guide execution and align with contract items.
• Pricing Information: A cost breakdown showing labor, materials, subcontractor costs, equipment, and overheads. It may also include allowances, markups, or contingency amounts.
• Time Adjustments: Any changes to the project schedule, typically stated in calendar days. This includes time extensions or reductions directly related to the change.
• Approvals: Signatures or initials from all required parties, including the contractor, client, and possibly consultants or architects. Formal approval is necessary before work begins.
• Attachments: Supporting documents such as updated drawings, photos, product specs, or relevant correspondence. These provide context and evidence for the change.

Legal Rules for Enforcing Change Orders

Managing change orders is also a legal and contractual issue. Construction contracts are built around specific procedures that govern how changes must be requested, documented, and approved.

Here are the key legal points to keep in mind when dealing with changes to the work:

Change Order Clauses in Contracts

Most construction contracts in the United States include a clause that outlines how the scope of work may be revised. Commonly called the “changes in the work” clause, it provides a structured process for modifying the contract and determining how those changes will be priced.

Standard form contracts like the AIA A201-2017 (Article 7) and ConsensusDocs 200 (Article 8) include these provisions as part of the general conditions. They typically require that any changes be documented in writing through a formal change order. Custom contracts may go further by stating that no verbal agreements are valid; only signed, written change orders are binding.

Here’s how the change order process usually works:

1. One party requests a change.
2. The contractor prepares a change order proposal with pricing and time impacts.
3. If both parties agree, they sign a written change order.
4. The contractor then performs the modified work.

That’s the ideal process. But in reality, things are often messier. On active job sites, changes can come up quickly, and there's constant pressure to stay on schedule. So, not every change gets formally documented before the work begins.

Enforceability and Verbal Agreements

So what happens if the proper procedures aren't followed? Can changes still be enforceable? Usually, yes. Even if a contract requires written change orders, courts may still enforce changes made through the parties’ conduct or verbal agreement.

For example, if a project engineer directs a contractor to perform additional work with the understanding that compensation will be sorted out later, the owner can still be obligated to pay, even if nothing was put in writing.

Construction Change Directives (CCDs)

When the contractor and owner can't agree on the terms of a change, the owner can still move forward by issuing a Construction Change Directive (CCD). This allows the owner to unilaterally direct a change in the work, even if the contractor hasn't agreed on the price or schedule adjustment.

Under AIA contracts, the architect determines how much extra time or compensation the contractor is owed for the CCD. If the contractor disagrees, it can file a claim or take legal action. But it must still perform the work. Refusing to do so is considered a breach of contract.

From the owner’s point of view, CCDs are a practical tool for avoiding project delays when negotiations stall. However, they raise legal questions: under common law, contract changes must be mutual and backed by consideration. Still, courts generally uphold CCD provisions.

Cardinal Change Doctrine

While owners have broad authority to make changes, that power has limits. The cardinal change doctrine protects contractors from being forced to perform work that goes far beyond the original agreement.

This doctrine applies when a change fundamentally alters the nature of the work that it amounts to a breach of contract by the owner.

For example, if a contractor is hired to build a hotel, and the owner later demands a movie theater instead. That’s not just a change, it’s essentially a new project. The contractor wouldn’t be required to perform the new work, even if the owner issued a CCD.

The doctrine can also apply when multiple change orders, taken together, significantly alter the original scope of the project. That’s why it’s important to step back and assess the cumulative impact of all changes over time.

What Project Managers Do in the Change Order Process

Project managers play a critical role in managing change orders. They lead the process from start to finish. They review requests, coordinate with teams, track impacts, and make sure everything stays on course.

Without strong oversight, change orders can cause delays, drive up costs, or create conflict. A project manager helps prevent that.

• Central Point of Communication: The project manager connects owners, contractors, designers, and subcontractors, ensuring everyone understands the change and its impact.
• Review and Validation: They assess if the request aligns with the contract, is necessary, and adds value before it moves forward.
• Impact Analysis: Working with estimators and schedulers, they evaluate how the change affects cost, time, and risk—and advise on next steps.
• Documentation Oversight: They ensure all changes are recorded using approved templates, with proper approvals, timestamps, and supporting documents.
• Implementation Coordination: Once approved, they update budgets, schedules, and trade scopes, then communicate changes to field teams for smooth execution.
• Cumulative Change Monitoring: They track the overall impact of multiple changes to avoid scope drift or contract violations.
• Using Technology: Digital tools help streamline approvals, automate workflows, and maintain visibility across teams.

Best Practices for Managing Change Orders

Effective change order management is critical to keeping construction projects on track. These core practices help ensure a structured and efficient process:

• Clear Contract Terms: Establish well-defined scopes of work and formal change procedures in the contract. Outline how change orders will be initiated, reviewed, approved, and priced. Clarity at the outset reduces ambiguity and conflict later in the project.
• Effective Communication: Maintain open and consistent communication between all stakeholders—owners, contractors, consultants, and subcontractors. Discuss proposed changes early and confirm that all parties understand the scope, rationale, and implications of each change.
• Timely Documentation: Document changes promptly and thoroughly. Use a standardized change order template and ensure all approvals are in writing. Timely documentation creates a reliable record, reduces disputes, and supports cost recovery.
• Utilizing Technology: Implement project management software, like Mastt, to streamline change order tracking, approvals, and cost control. Digital tools improve visibility, automate workflows, and centralize documentation, allowing for faster and more accurate decision-making.
• Training and Education: Ensure that all team members understand the change order process and their responsibilities within it. Provide training on contract requirements, documentation protocols, and the use of relevant software tools to ensure consistent execution across the project.

Change Orders vs Other Contract Tools

Not every project change needs a change order. Sometimes a different tool fits better. Here’s how to tell the difference.

Change Order vs Variation

In most cases, these mean the same thing. "Change order" is common in the U.S., while variation in construction is used in places like Australia and the U.K. Both refer to written changes to a construction contract’s scope, cost, or time. The name might change, but the purpose doesn’t.

Change Order vs Contract Amendment

A contract amendment is broader. It updates the contract itself, not just the work being done. For example, changing payment terms, insurance requirements, or dispute resolution clauses would require an amendment. A change order, on the other hand, sticks to the work: what’s being built, how much it costs, and how long it’ll take.

Change Order vs Contingency Use

If you’re drawing from a contingency, you’re still operating within the original contract. You don’t need to issue a change order to use those funds, as long as the work stays within scope.

Contingency covers known risks and small adjustments that were expected from the start. If the work goes beyond that scope or affects time or budget in a bigger way, a change order is the right move.