How to Handle Construction Change Order

A Guide for Smooth Project Management

Construction projects often involve various stages and components, and it’s not uncommon for changes to arise during the work. These changes, known as construction change orders, can impact the timeline, budget, and overall project scope. In this comprehensive guide, we’ll explore the best practices for handling construction change orders, understand the change order clause in construction contracts, delve into reasons for change orders, and shed light on the importance of accurate construction cost estimation.

Understanding Construction Change Orders

At the heart of effective construction project management lies the ability to handle change orders seamlessly. A construction change order is a formal request to modify the original scope of work, and it can encompass alterations to design, materials, schedule, or even budget. These changes often arise due to unforeseen issues, design modifications, or client requests. Managing them efficiently ensures that the project stays on track and meets expectations.

Best Practices for Handling Change Orders

Dealing with change orders requires a systematic approach to avoid delays and budget overruns. Here are some best practices to consider:

Clear Documentation:

Maintain detailed records of the original project plans, contracts, and any communications related to the changes. This documentation can be crucial for resolving disputes and ensuring transparency.

Timely Communication:

Establish open lines of communication among all stakeholders, including the project owner, contractors, and subcontractors. Promptly address potential changes and discuss their implications on the project.

Impact Assessment:

Evaluate the impact of proposed changes on the project timeline, budget, and resources. This assessment helps in making informed decisions and setting realistic expectations.

Detailed Cost Estimation:

Accurate cost estimation is pivotal. Consider factors like labor, materials, equipment, and potential indirect costs due to changes.

Change Order Approval:

Obtain written approval from the client or relevant parties before making any changes. This avoids misunderstandings and ensures everyone is on the same page.

Understanding the Change Order Clause in Construction Contracts

Most construction contracts include a change order clause that outlines the process for requesting and approving changes. This clause typically details the following:

  • The procedure for submitting change orders.
  • The criteria for evaluating the necessity of the change.
  • How additional costs or time extensions will be calculated.
  • The parties are responsible for approving the change.

Understanding this clause is essential, as it forms the legal framework for managing change orders.

Reasons for Change Orders in Construction

Change orders can stem from various factors:

Design Modifications:

As projects progress, stakeholders may realize the need for design changes to enhance functionality or aesthetics.

Unforeseen Issues:

Discovering unexpected site conditions or structural challenges may necessitate alterations to the original plans.

Client Requests:

Clients might change their preferences or requirements during the project, leading to adjustments in the scope.

Regulatory Changes:

Evolving regulations or codes may require modifications to ensure compliance.

The Importance of Accurate Construction Cost Estimation

Accurate cost estimation is the cornerstone of successful project management. It helps prevent budget overruns, ensures proper allocation of resources, and enables stakeholders to make informed decisions.


Q1: What role does the change order clause play in construction contracts?

A: The change order clause outlines the process for requesting and approving changes, ensuring a structured modification approach.

Q2: Can clients request unlimited changes through change orders?

A: While clients can request changes, they are typically evaluated based on their impact, feasibility, and necessity to maintain project feasibility.

Q3: How does accurate cost estimation affect change orders?

A: Accurate cost estimation helps anticipate the financial implications of change orders, aiding in decision-making and preventing budget issues.

Q4: What happens if change orders are not managed effectively?

A: Poorly managed change orders can lead to project delays, increased costs, and disputes, and negatively impact stakeholder relationships.

In conclusion, construction change orders are an integral part of project management in the construction industry. Project stakeholders can navigate these changes by following best practices, understanding change order clauses, and estimating costs accurately. Open communication, thorough documentation, and a proactive approach ensure that change orders enhance project outcomes rather than hinder them.

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