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Change Order

A Change Order is a formal document outlining modifications to a construction project’s scope, schedule, or budget, requiring approval from involved parties.

What is Change Order?

A Change Order (CO) is a formal document outlining modifications to the project scope, schedule, or budget in construction management. It serves as a legally binding record of agreed-upon changes, ensuring clarity, preventing disputes, and protecting the interests of all involved parties.

Change Order Scope:
  • The Change Order Scope meticulously documents the specific details of the proposed change. This comprehensive documentation ensures clear communication and minimizes the risk of misunderstandings. It includes a detailed description of the modification, along with its impact on various project elements.
Change Order Impact:
  • A Change Order can have a ripple effect on various project aspects. The Change Order Impact analyzes these potential consequences in detail. It typically considers the impact on cost (including a breakdown of materials, labor, and equipment required for the change), schedule adjustments required to accommodate the change and any potential delays, and potential downstream impacts on other project elements that might be affected by the modification.
Change Order Approval Process:
  • The Change Order Approval Process outlines the defined workflow for submitting, reviewing, negotiating, and approving Change Orders. This process typically involves multiple parties with specific roles and responsibilities. The contractor who proposes the change initiates the process by submitting a formal request with a detailed Change Order Scope and Impact analysis.
Impact Cost Estimate:
  • An Impact Cost Estimate is a crucial element of a Change Order. It provides a detailed breakdown of the additional costs associated with the proposed change. This estimate serves as a critical financial reference point for negotiation and decision-making. .
Change Order Negotiation:
  • Change Order Negotiation is the process of discussing and agreeing upon the final terms of the Change Order. This collaborative process typically involves the contractor who originally proposed the change and the owner (or their representative) who will be financially impacted by the change. The negotiation focuses on reaching a mutually beneficial agreement on the scope of work, ensuring clarity and alignment with the Change Order Scope.

Effective Change Order management is crucial for construction projects. This glossary provides a starting point for understanding key concepts related to Change Orders.


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