What Is a PCO in Construction and Why It Matters

July 9, 2024

In the world of construction, what is a PCO in construction is a crucial question to address for anyone involved in project management. A Potential Change Order (PCO) is a tentative or informal change order that tracks work conditions which might exceed the base contract. It does not create a legal and binding contract between the project owner and contractor but establishes a chain of events leading to contract modifications.

Understanding What is a PCO in Construction

A PCO in construction, often also referred to as a Change Order Request (COR), serves as a preliminary step in the change order process. PCOs provide a way to document potential changes to the project, allowing for negotiation and modifications before they are turned into formal and binding Change Orders. This stage is crucial for overall cost tracking and project management efficiency.

The Purpose and Importance of PCOs

One key purpose of a PCO is to predict and outline potential issues that could arise during the project. This foresight allows subcontractors to provide cost estimates for the changes, which can help mitigate project delays and increased costs. Properly managing a PCO process is incredibly important to the success of any construction project, as it ensures that all potential changes are documented and reviewed.

How to Manage and View PCOs

Managing PCOs involves several important steps, including estimating costs, negotiating terms, and documenting proposed changes. Project management software such as Projectmates or CM Fusion can simplify the PCO process by providing features like document management, scheduling, daily field reports, and time and cost tracking.

For example, to view Potential Change Orders in Projectmates, you would simply navigate to the Cost Tracking menu and access the PCO section. Note that depending on the specific implementation, menu names and navigation steps may vary, so always ensure to follow the correct procedures for the software being used.

Steps for Using PCOs Effectively

Utilizing PCOs effectively involves several key considerations:

  • Pricing and submitting requests for quotes promptly.
  • Ensuring timely approval of PCOs to avoid project delays.
  • Maintaining clear communication and collaboration among project stakeholders.

Skipping the PCO process or mismanaging it can lead to significant setbacks, impacting project timelines and escalating costs. Tools like ERP construction software, such as CMiC, can be invaluable in streamlining these processes, reducing manual entry, automating approvals, and improving overall project efficiency and communication.


In summary, understanding what is a PCO in construction is essential for effective project management. PCOs help predict potential issues and allow for structured negotiations and modifications, which are critical for maintaining project timelines and budgets. Utilizing construction management software can greatly enhance the efficiency of managing PCOs, ensuring transparency, cost control, and successful project outcomes.

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