Completing a change order correctly minimizes risk, improves the chances of approval, and helps contractors get paid faster. This guide contains information on how to fill out a change order form, key details to include, and pitfalls to avoid during the change order process.
Table of
Contents
- What is a Change Order?
- Changing the Scope of Work
- Six Key Elements of a Change
Order
- Project and Contact Information
- Dates of the Change
- Details of the Work
- Updated Schedule
- Cost of the Change
- Updated Contract Value
- Submitting a Change Order
- Match the Payment Application
- Get it in Writing — and Save it
- Change Order Template
What is a
Change Order?
A change
order is a document used to alter the original agreement on a construction
project. It details the changes in the scope of work, cost, and schedule that
are required. Many construction contracts dictate the change order process,
providing specific guidelines on how to manage and process the change order.
Change
orders can significantly impact the project scope and schedule and can affect a
contractor’s liability and payment.
Changing
the Scope of Work
Construction
projects often undergo changes due to various unforeseen conditions. When
changes occur, contractors should request a change order and obtain the
property owner's signature to ensure payment and limit liability.
Types of
Scope Changes:
- Owner-Initiated Changes: More or less work requested by
the project owner.
- Site Condition Changes: Conditions that differ from
what was expected, impacting the cost or feasibility of the original
scope.
- Top-Down Changes: Change directives without the
contractor’s input, also known as work request directives.
- Minor Changes: Architect’s Supplemental
Instructions (ASI) for immaterial changes not affecting cost or schedule.
- Value Engineering Change
Proposals (VECPs):
Suggestions for changes that reduce costs without impacting performance,
common in federal projects.
Six Key
Elements of a Change Order
To ensure a
change order is approved, it must contain the following essential details:
1.
Project and Contact Information
Include:
- Contract number
- Owner’s name and contact
information
- General contractor or
architect’s name and contact information
- Project name and address
- Contractor’s name and contact
information
- Change order number (tracking
all orders submitted)
2. Dates
of the Change
Include the
date you complete the change order. Additional helpful dates might include:
- Date of initial notice of the
change
- Date of change order submission
for approval
3.
Details of the Work
Describe the
work changes in detail:
- Reason for the change (e.g.,
site conditions, design changes, regulations, force majeure events)
- Detailed description of extra
work or work no longer required
- Attach supporting documents such
as photos, drawings, and written descriptions
4.
Updated Schedule
Include:
- Number of days to complete the
change
- New completion date
- Detailed analysis of the impact
on the overall project schedule if required
5. Cost
of the Change
Provide a
detailed cost breakdown, including:
- Positive and negative charges
- Overhead, profits, tax,
insurance, and other extra costs
- Unitized breakdown for all
costs, if applicable
6.
Updated Contract Value
Reflect
changes in the contract’s value:
- Original contract value
- Value of all past approved
change orders
- Cost of the current change order
- New proposed contract value
Submitting
a Change Order
Once
completed, the change order is signed and submitted to the owner or owner’s
representative. The contract typically specifies how long the project owner has
to accept, reject, or request additional information. Upon approval, the
contractor can begin the work.
Match the
Payment Application
Ensure the
change order format closely matches the application for payment or schedule of
values, facilitating easy comparison against the original contract value. Avoid
starting work without written approval, as this could lead to non-payment.
Get it in
Writing — and Save it
Always get
approval in writing before proceeding with any changes. Save copies of all
change orders and associated documents for record-keeping and future reference.
Government projects may require document retention for 3-10 years, while other
projects may have different requirements.
Change
Order Template
Below is a
comprehensive change order template that includes all necessary details for a
change order.
Field |
Description |
Change
Order Number |
Sequential
number for tracking all submitted change orders. |
Contract
Number |
The
contract number associated with the original construction agreement. |
Project
Name |
The name
of the construction project. |
Project
Address |
The
physical address of the project site. |
Owner
Name and Contact Info |
Name and
contact information of the project owner. |
General
Contractor/Architect Name and Contact Info |
Name and
contact information of the general contractor or architect. |
Contractor
Name and Contact Info |
Name and
contact information of the contractor requesting the change order. |
Date of
Change Order |
The date
the change order is completed. |
Date of
Notice |
The date
when notice of the change was first given (if applicable). |
Date of
Submission |
The date
the change order was submitted for approval. |
Description
of Change |
Detailed
description of the work changes, including reasons for the change and
supporting evidence. |
Updated
Schedule |
New
schedule including the number of days to complete the change and the new
project completion date. |
Cost
Breakdown |
Detailed
cost breakdown including labor, materials, overhead, profits, taxes, and
insurance. |
Original
Contract Value |
The value
of the original contract before any changes. |
Previous
Change Orders Value |
The
cumulative value of all previously approved change orders. |
Current
Change Order Value |
The cost
associated with the current change order. |
New
Contract Value |
The
updated contract value after including the current change order. |
Approval
Signatures |
Signatures
of the owner, general contractor/architect, and contractor indicating
approval of the change order. |
By following
these guidelines and utilizing the provided change order template, contractors
can efficiently manage change orders, reducing risk and ensuring timely
payment.
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