How to Do a Change Order

The change order process begins with identifying the need for a modification, often triggered by updated construction drawings, revised specifications, or newly discovered site conditions.

Effective change order workflows are a core part of construction operations management, ensuring scope changes are documented, approved, and tracked without disrupting active job sites.

The contractor then prepares a detailed proposal, including cost estimates and schedule adjustments. 

Once both parties agree, the change order is signed and becomes legally binding. 

Proper management of change orders is critical to minimizing disruptions, maintaining project efficiency, and ensuring all stakeholders remain aligned.

Here’s a step-by-step guide on how to manage a change order effectively:

Step 1: Identify the Need for a Change Order

Review the Contract: Ensure that the contract includes a clause for handling change orders, outlining procedures for modifications to the original scope of work.

Determine the Reason: Identify why a change is needed, such as unforeseen site conditions, latent defects, design errors, or client requests.

Step 2: Draft the Change Order Request

Prepare a Proposal: Include a detailed description of the change, supported by construction photo documentation, updated cost projections, and schedule impact analysis.

In projects where scope adjustments must be formally issued before pricing, teams may use structured construction change directives (CCDs) to document authorized work pending final cost agreement.

Use a Standard Form: Utilize a standardized template or digital form system, such as structured construction documentation workflows, to maintain clarity and consistency across projects.

Step 3: Submit for Approval

Review and Negotiation: Send the change order request to stakeholders for review and negotiation. Ensure all parties agree on the scope, cost, and schedule adjustments.

Obtain Signatures: Secure signatures from the project owner, contractor, and architect/engineer to formalize the agreement.

Step 4: Implement the Approved Change

Notify Team Members: Inform all relevant parties, including subcontractors and suppliers, about the approved changes.

Update Project Plans: Adjust the project schedule and budget to reflect the new terms. Syncing approved changes with payroll systems like ADP Workforce Now ensures updated labor costs are reflected accurately in job costing and time tracking. Tracking implementation also supports broader construction production tracking and long-term cost control.

Step 5: Track and Close the Change Order

Monitor Progress: Ensure the changes are implemented as planned using structured construction daily reports and field tracking tools to monitor labor, materials, and production progress.

Document Completion: Close the change order once the work is completed, update final payment records, and revise as-built drawings to reflect the completed scope changes.

Best Practices

Use Standardized Templates: Ensure consistency and efficiency by using standardized change order templates.

Maintain Clear Communication: Keep all stakeholders informed throughout the process to avoid misunderstandings. When communication breaks down, scope changes quickly turn into disputes. A documented process supported by clear construction change management practices helps keep approvals organized and responsibilities clear.

Document Everything: Keep detailed records of all changes and approvals for future reference. Detailed records also support structured field reports and compliance documentation, especially when managing high-risk adjustments or inspections.

For example, contractors like TR3 Group improved field accountability by standardizing how change orders, daily reports, and labor tracking were recorded across job sites.

References