Change order

A change order is a formal, written amendment to a construction contract that adds, removes or modifies the scope of work, along with the corresponding adjustment to the contract price and schedule. Changes arise constantly — design revisions, unforeseen site conditions, owner requests — but until a change is signed as a change order, the contractor is performing extra work without a contractual right to be paid for it. Disciplined change-order management means pricing and submitting changes promptly, tracking each one's status (proposed, approved, rejected), and not letting crews proceed on verbal approvals. Unapproved change orders are one of the most common causes of margin erosion and under-billing on the WIP schedule, which is why project management software tracks them alongside the base contract.

Related term: RFI (request for information)