Key takeaways
- A construction change order is a written agreement that changes a construction contract’s scope, price, schedule, or other terms.
- GC project managers coordinate the request, affected work, and related project records.
- An RFI asks for information. A change order records an approved contract change.
- Change management works best when the request stays connected to the contract, cost record, schedule, and supporting documents.
Change orders are just a part of construction: Designs change, conditions on the ground can be different than the best laid plans, and details might be missing.
Construction project managers who deal with this reality are responsible for figuring out the next step, what’s affected, which project records are related to the change, and how to get approval.
This guide covers the terms and typical steps teams use to move a proposed change through approval.
What is a change order in construction?
A construction change order is a written agreement that modifies an existing construction contract. It records an agreed change to the work and any related adjustments to the contract, costs, schedule, and other terms.
The contract and project delivery method determine who prepares, reviews, and signs off. Generally, the owner and contractor both approve the change, while the architect or construction manager participate in the review.
Change orders can add or remove work, or change how the work is completed. They can also change milestones or the contract duration. A request or estimate alone does not necessarily authorize the work.
Double check the contract, approval, and change order process before considering a proposed change to be approved.
Types of change orders
Changes are classified in several ways: whether they add or remove work, who agrees to them, how they are priced, and who requested the change. The contract sets the rules.
Additive vs. deductive change orders
An additive change order adds work or requirements, usually increasing the contract value or time. A deductive change order removes work or reduces requirements, which may lower the contract value. Both types affect sequencing, subcontractor commitments, and the remaining schedule.
Unilateral vs. bilateral change orders
A bilateral change order records terms that the parties have agreed to. A unilateral direction may authorize changed work before the parties agree on price or time (if the contract allows for it).
Some contracts use a construction change directive for this situation. The GC should follow the contract’s notice and documentation requirements and track any unresolved cost or schedule impacts.
Lump-sum vs. unit-price vs. time-and-materials change orders
A lump-sum change sets one agreed price for the defined work. A unit-price change applies an agreed rate to measured quantities. A time-and-materials change tracks labor, materials, and equipment under the contract’s rules, often with agreed-upon rates or limits.
The pricing method should fit the work and give both sides a clear way to verify the amount.
Common causes of change orders
Change orders can arise from any project stakeholder: The owner might request an update to the design, while a GC might instigate a change order after finding a conflict or unexpected condition. Subcontractors might flag an issue that affects its scope.
Common causes include:
- Owner design changes. The owner revises a finish, layout, system, or performance requirement after the team has priced or started the work.
- Errors or omissions in drawings and specifications. Conflicting details, missing dimensions or incomplete requirements can leave the contractor without enough information to perform the work as bid.
- Unforeseen site conditions. Soil, utilities, and existing structures may differ from what the plans or investigations showed. The GC should document the condition and follow the notification process specified in the contract.
- Code or regulatory changes. A new or revised requirement may affect design, materials, permits, or inspections during the project.
- Material or product substitutions. A specified product may become unavailable and require a substitute that changes cost or schedule.
- Scope clarifications missed at bid time. A question that remained unresolved during estimating can surface once crews begin the work. Early clarification makes it easier to tell whether the answer changes the contract.
Strong planning reduces avoidable changes, though it can’t remove every unknown. Construction project planning software can help teams organize scope, decisions and project information before work begins.
The change order process
The exact workflow depends on the contract and project. A consistent process gives the GC a reliable way to evaluate each change and communicate the impact.
Step 1: Identify the change
Record the date, location, affected drawings, or specifications and the source of the change. If an owner raised the request, document who made it and who approves it.
Related RFIs, photos and meeting notes can explain what changed and why. The GC should identify affected scopes and trades before sending the request for review/approval. Check the contract for deadlines and required recipients.
Step 2: Document the change with a change order request
A change order request organizes a proposed change for review. It should identify the source, requested scope, affected contract requirement, relevant drawing or RFI and any estimate available.
The GC may include supporting records from affected trades, depending on project procedures. The submission should identify which contract and change it refers to, especially if there are multiple revisions.
The change order request is still just a proposal: Just submitting it does not amend the contract. Again, check the project contract for the exact process.
Step 3: Price the impact on cost and schedule
Estimate the contract price and schedule adjustment under the pricing met.
Review the proposed change against the contract scope, supporting records, approval authority, and procedure.
The owner’s representative, architect, construction manager or another designated reviewer may request clarification or more documentation.
The GC should check that the submitted amount matches the described work and that affected parties have reviewed it. If the parties disagree about scope or terms, keep the specific question and revised materials with the request.
Step 4: Review and negotiate
Review the proposed change against the contract scope, supporting records, approval authority and project procedures.
The owner’s representative, architect, construction manager or another designated reviewer may request clarification or additional support.
The GC should check that the submitted amount matches the described work and that affected parties have reviewed it.
If the parties disagree about scope or terms, keep the specific question and revised materials with the request. The contract sets the review period and process for resolving disputes. This stage clarifies what the parties agree to include in the formal order.
Step 5: Approve and execute the formal change order
Once the parties agree, prepare a formal change order that describes the revised work and records the agreed adjustments to contract price or time. Reference supporting details and get approval from the people authorized in the contract.
Record the approval date and any conditions or exhibits that form part of the order. Some contracts allow an owner to issue a change directive before the parties settle all terms, and that process has its own requirements. The GC should share the approved CO with affected contractors and project teams, so everyone understands the approved scope.
Step 6: Update the contract, budget, and schedule
After approval, record the change against the correct contract and update the impacted project documents so they reflect the agreed scope, cost, and schedule.
Update any affected schedule activities and budget items to manage the changed work.
RFI vs. change order: What’s the difference?
An RFI asks a question about the contract documents or work.
A change order records an approved modification to the contract.
An RFI may reveal that the project needs a change, but the RFI itself does not usually change the contract price or schedule. Follow the project’s procedures to connect related records and keep the decision trail complete.
| RFI | Change order | |
|---|---|---|
| Purpose | Request clarification or missing information. | Record an approved contract change. |
| Timing | Raised when the project team needs an answer. | Prepared when the proposed change and its impact are ready for review and agreement. |
| What it changes | Usually does not change the contract by itself. | May change scope, price, schedule or other contract terms. |
| Initiates | A project participant with a question. | The owner, GC or another party under the contract process. |
Where change order reviews get stuck
- A change order is mistaken for an approved change: Teams may use a change order request, proposal, directive or change order at different stages, so status can be unclear.
- The request lacks enough detail: Reviewers may need the affected scope, drawing revision or related RFI before they can assess the proposed change.
- The wrong contract or revision is referenced: That makes it harder to confirm which scope or terms the proposed change affects.
- Approval authority is unclear: The project team may not know who can accept the change under the contract.
- The decision trail is split across records: Related requests, comments, and approvals may be hard to follow when they exist in separate places.
Managing change orders across GC projects
GCs may use different owner systems and document conventions across active projects. Different projects may have different forms, approval roles, or status labels may not match another’s; so teams still need to make sure they’re using the correct contract.
Linking each request to the affected drawings, RFI responses, estimate, and approval record gives reviewers the context in one place.
Across the company, consistent status fields can make pending and approved changes easier to report, even when project teams follow different owner workflows. The process can adapt to each contract while preserving a clear record for GC project managers and operations leaders.
Kahua’s Change & Contract Management solution connects change requests with contracts, approvals and cost activity in one project environment. See how Kahua supports contract and change management.
FAQs on change orders
The contract names the people who can approve a change. The owner or an authorized representative often approves it, while the architect or construction manager may review it. The GC also needs approval from their own authorized representative to accept the revised terms.
The contract sets the process. The GC should document the work, link it to field records, and submit it for review promptly. The owner might still need to approve the contract adjustment; late records can make the change harder to verify.
A contractor may challenge a proposed change that falls outside its contract or leaves price or schedule unresolved. Some contracts require work to proceed under a written directive while the parties settle those terms. The GC should follow notice requirements and document any disagreement.
A purchase order authorizes a vendor or subcontractor purchase. A change order modifies the owner-GC contract. After approval, the GC may also need to update the related purchase order or subcontract