Change order

A change order is a signed, priced amendment to a construction contract that adds, removes, or modifies scope, cost, or schedule after work is already under contract.

Nothing on a construction contract is fixed once the crew mobilizes. Plans get revised, owners ask for upgrades, field conditions turn up something nobody drew, and every one of those changes has to move through a change order before it's billable. A change order records what changed, what it costs, and who signed off — the three things a dispute always comes back to.

The format varies by contract type. AIA-based contracts use a formal change order form tied to the original agreement; smaller jobs might run on a one-page memo. What doesn't vary is the sequence: the change is identified, priced, and approved in writing before the work proceeds — not after.

Example

A GC's electrician hits an unmarked gas line while trenching for a footing. The fix adds two days of hand-digging and a permit call. Before that work starts, the GC writes a change order pricing the extra labor and equipment, the owner signs it, and the crew proceeds — instead of the sub doing the work on a verbal 'yeah, go ahead' and fighting about the invoice a month later.

Where this goes wrong on real jobs

Verbal approval in the field is where the paper trail — and the margin — disappears.

“They do the work, tell the GC 'no problem,' and then send me a vague text or a blurry photo of a scribbled note 2 weeks later. By the time I write up the Change Order, the GC denies it because it wasn't documented in time.”

— a specialty sub on r/Construction

Related terms

Construction change directive (CCD)A construction change directive (CCD) is a written order from the owner or architect to proceed with changed work immediately, used when there's no time to agree on price before the work must start.T&M ticketA T&M ticket (or daily ticket) is the field record of hours worked and materials used on a time-and-materials task, signed by the client or GC's representative on-site the same day.Back-chargeA back-charge is a deduction one party makes from another's payment to cover the cost of correcting deficient work, cleanup, or damage — without a signed change order authorizing it.Pay application (pay app)A pay application (pay app) is the formal monthly billing document a contractor submits requesting payment for work completed to date, measured against the schedule of values.

Used in

Scope gap analysis for general contractorsGCs who need to catch scope gaps across sub bids before they turn into change orders.Scope gap analysis for electrical subcontractorsElectrical subs checking plan notes and specs for scope that didn't make it into their bid.Change order template for subcontractorsSubcontractors who need a formal change order memo the same day the field asks for extra work.Change order template for foremenForemen who need to turn a field change into a documented change order without leaving the site.Change order template for small GCsSmall GCs who need every change order in writing before work proceeds, without slowing the job down.Change order template for remodelersRemodelers who need client-facing change orders that hold up when a scope disagreement comes up.Subcontractor scope of work for general contractorsGCs who need a formal, signed scope letter for every sub before they mobilize.Subcontractor scope of work for custom home buildersCustom home builders who need a written scope letter for every trade before the job starts.Construction addendum review for specialty subsSpecialty subs who need to know exactly what changed in an addendum before re-pricing their scope.Unbilled T&M work for foremenForemen and the crews they run, whose field changes turn into T&M work that never gets billed.Change order audit for specialty subsSpecialty subs who need to know how much dispute exposure is sitting in their change order documentation.Change order audit for general contractorsGCs who need to know where verbal approvals are creating dispute risk before it becomes litigation.

Next step

Where this shows up in Datumel:

Change Order MemoFree

Describe the change in plain language. Get a formal CO memo ready to send for approval.

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Change Order Audit$9,999 one-time

A review of your change order documentation and dispute exposure. Finds where approvals slip through verbal exchanges.

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