Change Orders: a Comprehensive Guide for Construction Pros

Understanding how a change order works and how to manage one effectively can set you apart in the construction industry. Whether you’re a construction manager or project coordinator getting your feet wet in jobsite logistics, you’re likely to encounter this term. 

In this comprehensive guide, we’ll break down the change order construction process, demystify key terminology, and walk through real-world considerations that every construction professional should master. We’ve also included a sample change order form you can use to properly document formal requests from either contractors or project owners.

Let’s start with a primer on key terms and definitions. 

What Is a Change Order in Construction?

A change order is a formal, documented modification or change to the original construction contract. These changes can relate to the project’s scope of work, timeline, cost, materials, or even labor.

• COR (Change Order Request): A formal document submitted to request a change in the contract’s scope, time, or cost. This usually includes pricing, justification, and supporting documentation.
  
  
• PCO (Proposed Change Order): A preliminary notice that a change may be coming. It’s not always priced yet, but it signals to stakeholders that something needs attention.
  
  
• ECO (Engineering Change Order): A technical revision made to the design or engineering documents, often impacting structural or systems-level elements.
  
  
• RFI (Request for Information): A formal question sent to clarify design intent, often used when plans are unclear or conflict. RFIs often lead to change orders.
  
  
• Critical Path: The sequence of tasks that directly determines the project’s end date. A change impacting critical path items can delay the entire job.
  
  
• Directive: A written instruction from the owner or architect to proceed with a change before formal approval. This is commonly used when time is tight.
  
  
• Backcharge: A deduction made from a subcontractor’s payment to cover extra costs (like fixing defective work), sometimes tied to unapproved changes.  
  
  

While a change order may come as a surprise most of the time, it’s important to understand that change orders are not inherently bad or avoidable. In fact, they’re a normal part of almost every construction project, especially for those with complex scopes or long timelines.

Types of change orders include:

• Additive Change Orders: Increase the scope of work and cost.
  
  
• Deductive Change Orders: Decrease the scope and reduce the price.
  
  
• Substitute Change Orders: Replace one task or material with another of equivalent value.
  
  

Common Reasons for Change Orders

Reasons for change order are not limited to budget constraints or human error. Here are common reasons for requesting change orders:

1. Design Revisions – Changes made by architects or engineers often result in an engineering change order. These might stem from overlooked issues, new client requests, or code compliance requirements.

2. Site Conditions – Unforeseen conditions like poor soil, underground utilities, or hazardous materials can cause projects to change halfway through.

3. Material Availability – There are times a specified material becomes unavailable or delayed, requiring a replacement material as a substitute.

4. Owner-Initiated Changes – Clients sometimes change their minds. Whether it’s a layout adjustment or an upgrade in finish materials, their input often results in formal documentation.

5. Errors or Omissions – Mistakes in blueprints, miscommunications in scope, or incorrect assumptions can also lead to a change order.

Understanding the Change Order Process

Change orders follow a relatively standardized flow. However, as a human transaction, how you manage that process can affect relationships with subcontractors, clients, and your internal team. Here’s what typically happens in a change order process:

Step 1: Identify the Need

A foreman, subcontractor, owner, or design professional identifies a condition that doesn’t match the original agreement.

Step 2: Evaluate the Impact

Determine how the change affects cost, schedule, and resources. This usually requires input from estimators, project engineers, and schedulers.

Step 3: Submit the Change Order Request

The change order request (often abbreviated as COR) should include a detailed description of the change, cost estimates, impact on schedule, and justification for the change requested.

Step 4: Review and Approve

The general contractor or owner must review and approve the COR. This stage can involve negotiations, so be sure to clearly communicate key information to all parties.

Step 5: Implement the Change

Once signed, the new scope becomes contractually binding. The field team must be updated immediately to avoid rework or delays.

Key Players in the Change Order Construction Process

A change order process involves different project stakeholders. Knowing who is responsible for what can make collaboration smoother.

Change Order Template

Below is a sample change order form you can use to properly document formal requests from either contractors or project owners.

To download your free change order template, click here.

Specialty Inspections and Change Orders

As mentioned above, a change order can sometimes be triggered by a specialty inspection. These are inspections beyond the usual framing, electrical, or plumbing sign-offs. Specialty inspections might cover: 

Fireproofing – Ensures fire-resistant materials are applied correctly to protect structural elements and meet code requirements. Proper fireproofing is essential for building safety.

Weld inspections – Check the quality of welds on structural components to meet safety standards. Issues found often require rework, triggering change orders.

Soil compaction – Verifies soil beneath foundations is compacted properly to support the structure. Poor compaction can cause settlement, requiring corrective work.

Structural steel connections – Inspect bolts and welds between steel members to confirm secure installation. Problems may lead to additional work and delays.

Envelope testing (air/water barriers) – Tests the building’s exterior for leaks and energy efficiency. Failures often result in costly repairs and adjustments. 

When change orders are requested following inspection findings, make sure to address pertinent issues. Otherwise, you might have to repeat change orders or worse, deal with a bigger problem down the road. 

Digital Tools for Managing Change Orders

Handling change orders is an important aspect of good project management. Leveraging digital tools and platforms to streamline change orders and, on a wider scale, construction project management, is always a good idea. Here are some key features you should look for in a digital tool to manage change orders:

• Automated Scheduling and Dispatching
  Quickly assign and reschedule tasks using a digital calendar with drag-and-drop functionality, supporting recurring and emergency jobs while instantly notifying your team.
  
  
• Real-Time GPS Time Tracking
  Track employee hours and locations accurately with GPS-verified time stamps, automatic clock-in/out based on geofenced sites, and facial recognition to prevent buddy punching.
  
  
• Job and Cost Tracking
  Monitor labor, travel, and material costs in real time, allocating expenses to specific projects or tasks for precise billing and profitability analysis.
  
  
• Easy Documentation and Communication
  Attach notes, photos, receipts, and checklists directly to tasks or time cards, improving communication and maintaining clear job records.
  
  
• Customizable Reporting Dashboards
  Generate detailed reports on attendance, costs, and productivity filtered by employee or project, helping to stay on budget and improve future estimates.
  
  
• Payroll and Accounting Integrations
  Connect seamlessly with systems like QuickBooks, ADP, and Sage to automate payroll and accounting workflows, eliminating duplicate data entry.
  
  
• Labor Compliance Tools
  Automate overtime and break rules, maintain GPS-verified audit trails, and provide workers with weekly summaries to ensure regulatory compliance and reduce disputes.
  
  

These features help ensure version control, timestamping, and audit trails when a change is requested or approved. Workyard is a natural partner app when managing digital change orders. Workyard not only provides real-time GPS time tracking, job costing, and automated data syncing, but also seamlessly integrates with your existing payroll and accounting systems. The app also offers customizable reports and collaborative tools, making it an all-in-one solution for managing change orders and field operations quickly and efficiently.

Common Mistakes to Avoid with Change Orders

Handling a change order well means steering clear of common mistakes to avoid cost overruns, payment delays, or even legal disputes. Here are some to watch out for:

1. Proceeding Without Written Approval

Never assume a verbal “go-ahead” is enough. Starting work without a signed change order can leave your company footing the bill if disputes arise later. Always wait for formal approval, especially for scope changes that impact cost or schedule.

2. Vague Scope Descriptions

Another common mistake is failing to clearly define what the change involves. Phrases like “adjust plumbing” or “minor revisions” are too ambiguous. Be as specific as possible about what’s being added, removed, or modified.

3. Not Documenting Cost or Time Impacts

Every change should include a detailed breakdown of added costs (materials, labor, equipment) and any schedule extensions. Skipping this step makes it hard to justify claims later on.

4. Poor Communication with Subcontractors

If you don’t clearly communicate changes to your subcontractors, you risk major reworks or delays. Always loop in the relevant trades and ensure they have the updated drawings or instructions.

5. Failing to Track in a Central Log

Without a centralized change order log, it’s easy to lose track of what’s been submitted, approved, or billed. Use a shared digital tool or spreadsheet to keep everything visible and up to date.

Troubleshooting Common Change Order Problems

Even when your process is foolproof, change orders can cause friction on the jobsite and in the office. Know how to spot trouble early and respond with a ready solution. Here are some common problems that arise with change orders, along with practical ways to troubleshoot them.

1. Disputes Over Scope

The Problem: One frequent headache is when stakeholders disagree on whether a change is within the original contract or constitutes extra work. This often leads to tension between the owner, general contractor, and subcontractor.

How to Troubleshoot: Go back to the original contract documents and scope of work, highlighting the specific section in question and showing how the requested change deviates from the agreement. Use RFIs, drawings, or emails to prove the change is outside the original contract. Be respectful but firm and factual in your presentation.

2. Unrealistic Turnaround Expectations

The Problem: An owner might demand a quick fix or change without understanding the needed time for material acquisition, permitting delays, or labor availability.

How to Troubleshoot: Be transparent about realistic project timelines. Use your project calendar to show how the change impacts the schedule. If delays are unavoidable, offer options such as temporary solutions or phased implementation.

3. Sticker Shock from Clients

The Problem: Clients can underestimate the cost of “minor” changes and may push back when presented with a formal change order.

How to Troubleshoot: Break down your costs clearly and line by line. Show how labor, materials, and indirect costs like supervision or equipment add up. 

4. Delayed Approvals

The Problem: A change request sits for days or weeks without action from stakeholders, stalling work and frustrating field workers.

How to Troubleshoot: Try to set expectations early. Define the turnaround time for approvals (e.g., 48 hours) at the project kickoff. Follow up with polite but firm reminders and document all outreach efforts for accountability.

5. Inconsistent Documentation

The Problem: Different teams may track change orders in different formats, or not at all. This can lead to billing errors, scope confusion, and scheduling issues.

How to Troubleshoot:
Standardize the change order process across the board. Use a centralized log or digital platform where all project managers and coordinators can follow updates. Train your team on how to properly submit, track, and archive every change.

By recognizing common issues early, your company can stay ahead of disputes and protect your bottom line. Remember, good change order management isn’t just about paperwork, it’s also about communication, clarity, and control.

The Bottom Line

Change orders are an unavoidable — and often necessary — part of the construction process. A lot of times, they can come as an unpleasant surprise.

If you’re unprepared, your team can be easily thrown off track by an unforeseen change order. But with preparation, a proactive mindset, and solid documentation practices, you can step confidently into any jobsite meeting and guide your team through the challenges.

Workyard is a dedicated workforce management solution offering tools tailored for the field like GPS time tracking, scheduling, and job costing. It also offers advanced operations tools like its smart form builder.

Workyard’s smart form builder enables you to create forms from photos or scan of your existing form. You can also import spreadsheets, convert forms from another tool, or download an image of a form you’d like to use—Workyard’s smart for builder will have a usable form for you to use in no time.

Click the links above to see how it works, or sign up for a free trial of Workyard today to streamline your project management and time-tracking processes.