What is Change Order in Construction?

February 27, 2024

The term change order is ubiquitous in the construction industry, and it’s a rare project that wraps up without at least one disputed change order. Change orders occur for a variety of reasons, from design changes to unexpected project delays. This article will discuss the basics of what a change order is and provide some tips on how to manage them effectively.

A change order is a document that revises the original terms of a contract between a contractor and client. Typically, the process starts with one party requesting a change and the other reviewing the request to determine its impact. Once both parties agree to the scope of work, pricing and schedule, a formal change order is prepared and executed.

There are many different types of change orders, including additive change orders (like changing the size of a window), and deductive change orders (changing from tile to carpet). Other common change orders involve adding equipment, altering building materials or adjusting the project timeline.

A well-managed change order process can help keep projects on track, protect contractors’ interests and ensure the project is completed correctly. However, it’s important to limit change orders from the start by limiting the scope of work and setting clear expectations for both clients and contractors during pre-construction planning. Additionally, contractors should always read and understand the clauses in their contracts regarding submitting change requests and the timeframes for initiating them. By being proactive, contractors can avoid costly legal disputes and delays while ensuring they receive payment for their work.

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