What Is a Construction Change Order?

by Dave Jennings; Updated September 26, 2017
New home construction framing.

Because most construction projects are undertaken on a bid and contract basis, the scope of work must be clearly defined before actual work begins. During the process of building, a wide variety of reasons may cause plans to change. A change order, a supplement to the existing construction contract, covers the cost of and defines the process for the adjustment to the original plan.

Contracts

Construction contracts come in many different types and styles, but most building projects require a contract of some sort. Construction contracts, like any other contract, define the duty that each party to the contract has to the other(s). The scope of work, the time frame and the cost are all set forth in this legal document. Because of the complexity of many construction projects, it is most desirable for the scope of work, or the details of what the project entails, to be clearly defined and agreed upon prior to the start of the job.

Estimating

Usually, a customer wishing to undertake a construction project invites several general contractors and/or construction managers to make bids for the work. The process of bidding on construction projects requires the utmost care and attention to detail because, once the contract has been awarded and signed, it becomes binding on both parties. Bids must be an accurate reflection of the actual costs of construction, and in order to be such, the scope of work must be clearly defined.

Change Order Types

The most common types of change orders made during the construction process are a change in scope (when a client decides to add something to the existing job), unforeseen conditions (when a builder runs into a problem that could not have been anticipated) and professional errors and omissions (when a builder claims that plans and designs drawn by an architect or engineer do not accurately reflect real conditions or are in some way incorrect).

Significance

Because change orders only occur when a contract already exists, they can be a real obstacle to the progress of building projects. Even though both parties have agreed to the original contract, they may not agree about necessary changes, whose fault it is that a change needs to be made, or how much such changes should cost. Some projects are held up for months while parties to the contract argue over these details. Change orders have the potential to become expensive and difficult.

Expert Insight

Before building begins, consider, as much as possible, all potential obstacles a construction project may face. Accurate estimates of the cost of work reflect these careful considerations. Still, there are times when change orders cannot be avoided. When they are necessary, both parties must seek to work together to solve the problem as quickly and amicably as possible. Much can be accomplished with a spirit of compromise.

About the Author

Dave Jennings has been writing professionally since 2010. His articles appear on eHow, where he specializes in do-it-yourself projects and budget travel. Jennings holds a Bachelor of Arts in urban planning from Central Connecticut State University.

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