📝 Change Order Workflow Playbook

Document scope changes, get approvals, and track cost/schedule impacts properly. The #1 rule of change orders: document first, execute second. Work performed without written authorization is work you may never get paid for.

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Why Change Order Management Matters

Without a Process	With a Process
"We told you verbally" — disputed verbal directions	Written COR with documented direction
Performed extra work with no approval — unpaid	Work authorized before execution
No cost backup — GC disputes your pricing	Detailed pricing with backup documentation
Schedule impact ignored — you absorb the delay	Documented time impact included in COR
Lump-sum negotiation with no leverage	Cost breakdown supports fair negotiation

The Golden Rule

Never perform extra work without written authorization. If you're told verbally, confirm in writing before starting. If you're forced to start due to schedule pressure, send a written notice of intent to claim the cost within 24 hours.

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Roles and Responsibilities

Role	Responsibilities
Field Personnel	Identify changed conditions, document immediately (photos, notes), notify foreman
Foreman	Report potential change to superintendent, track extra labor/equipment/materials separately
Superintendent	Notify PM of potential change, document field conditions, review COR for accuracy
Project Manager	Draft COR, prepare pricing, submit to owner/GC, negotiate, track approval
Project Engineer	Maintain change order log, assemble backup documentation, track status
Estimator	Prepare detailed cost estimates for COR pricing

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Types of Changes

Type	Trigger	Example
Owner-directed change	Owner requests additional or different work	"Add 6 electrical outlets to Conference Room B"
Design error / omission	Drawings or specs are wrong or incomplete	Structural conflict discovered — RFI confirms redesign needed
Differing site conditions	Actual conditions differ from contract documents	Underground rock not shown on geotech report
Regulatory change	Building code or permit requirement changes	Inspector requires additional fire stopping not in original scope
Schedule acceleration	Owner requests earlier completion	"We need to move in 2 weeks earlier"
Scope reduction (credit)	Owner removes work from your scope	"Delete the interior painting from your contract"

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Step-by-Step Process

Step 1: Identify the Change (Immediately)

The moment anyone on your team identifies potential extra work:

1. Stop and evaluate — Is this in our contract scope? Check the contract documents.
2. Do NOT proceed with the extra work unless there's a safety or emergency reason
3. Notify the superintendent and PM — immediately, verbally + in writing
4. Document the condition — Photos, measurements, descriptions
5. Start tracking costs separately — Use a separate cost code for the potential change

Step 2: Send Written Notice (Within 24–48 Hours)

Check your contract for notice requirements. Most contracts require written notice within a specific timeframe (often 7–21 days). Missing the notice deadline can waive your right to the change order.

Written notice includes:

• Date
• Contract and project reference
• Description of the changed condition or direction
• Contract provision requiring the change (if applicable)
• Statement of intent to request a change order
• Request for direction on how to proceed

Example notice:

"This letter serves as notice that on 02/12/2026, during excavation at Grid B/4, we encountered rock at elevation 98.5'. The geotechnical report (dated 08/2025) indicates soil to elevation 95.0'. This constitutes a differing site condition per Section 4.3 of the contract. We request direction on how to proceed and reserve our right to submit a change order for the additional cost and time required for rock removal."

Step 3: Document Everything

What to Document	How	Why
Photos of the condition	Before, during, and after	Visual evidence of the change
Daily reports noting the change	Separate entries for change work	Contemporaneous record
Extra labor hours	Separate time cards or cost codes	Cost backup
Extra equipment	Usage logs with hours	Cost backup
Extra materials	Receipts, delivery tickets, invoices	Cost backup
Written directions received	Emails, RFI responses, meeting minutes	Proof of direction
Schedule impact	Updated schedule showing delay/acceleration	Time extension support

Step 4: Prepare the Change Order Request (COR)

COR Package includes:

1. Cover letter — Summary of the change, contract reference, total cost and time requested
2. Detailed cost breakdown:

Cost Category	Calculation Method
Labor	Hours × rate (including burden) per worker/trade
Materials	Quantity × unit cost (with supplier quotes or invoices)
Equipment	Hours × rate (rental rate or internal rate)
Subcontractor costs	Sub's quotes or invoices (with your markup)
Overhead	Per contract (typically 10–15% of direct costs)
Profit	Per contract (typically 5–10% of direct costs)
Bond premium	If bonded (typically 1–2% of change amount)
Total	Sum of all categories

3. Backup documentation — Time cards, material receipts, equipment logs, photos, RFI responses
4. Schedule impact analysis — Days of delay or acceleration, revised milestone dates
5. Markup substantiation — Reference the contract markup provisions

Step 5: Submit and Track

1. Submit COR per contract requirements (usually to GC or owner's representative)
2. Log in the change order tracking system
3. Request written acknowledgment of receipt
4. Set follow-up reminders:
   • Day 7: Follow up if no response
   • Day 14: Formal follow-up with schedule impact warning
   • Day 21+: Escalate per contract dispute provisions

Step 6: Negotiate

Approach	When to Use
Agree on price before work	Preferred — no risk of non-payment
T&M with not-to-exceed	When scope is unclear — track actual costs up to a cap
T&M open-ended	Emergency or undefined scope — agree on rates, track actual costs
Proceed under protest	When forced to start before agreement — document everything, reserve rights

Negotiation tips:

• Start with your detailed backup — let the numbers speak
• Be prepared to explain every line item
• Know your contract markup rates before negotiating
• Don't accept "we'll work it out later" — get it in writing
• If you can't agree on price, agree on a method (T&M) and track it

Step 7: Execute the Change Order

Once approved:

1. Receive signed change order document
2. Verify it matches what was agreed (scope, cost, time)
3. Distribute to field — superintendent, foreman, affected subs
4. Update the schedule of values
5. Include in the next pay application
6. Update project budget and schedule

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Change Order Log

Track every potential and actual change:

#	Description	Date Identified	Notice Sent	COR Submitted	Amount	Status	CO #
PCO-001	Rock at Grid B/4	02/12	02/12	02/20	$28,500	Under Review	—
PCO-002	Add outlets to Conf Room B	02/14	N/A (owner directed)	02/18	$4,200	Approved	CO-003
PCO-003	RFI-042 beam redesign	02/15	02/15	Pending	TBD	Pricing	—

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Common Mistakes

Mistake	Consequence	Fix
Performing work before approval	Owner can refuse to pay	Get written authorization first — always
Missing the notice deadline	Waive your right to the change	Know your notice requirements, send notice within 24 hours
Verbal agreements	"That's not what we agreed to"	Confirm everything in writing
Incomplete cost backup	GC disputes your numbers	Track every hour, receipt, and invoice from day one
Ignoring schedule impact	You absorb the delay	Always include time extension request with cost
Bundling unrelated changes	One disputed item holds up the whole package	One COR per change — keep them separate
Not tracking pending changes	Lost revenue	Maintain a change order log, review weekly

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Metrics

Metric	Target	Frequency
Notice sent within 48 hours	100%	Per occurrence
COR submitted within 14 days of direction	over 90%	Per occurrence
Approval rate	over 80% of submitted CORs	Monthly
Average approval time	under 30 days	Monthly
Pending COR value	Tracked and reported	Weekly
Collection rate on approved COs	100% collected	Monthly

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Related Resources

Resource	Link
Change Order Request Generator	Generate COR
Change Order Log Tracker	CO Log
Change Order Guide	Full Guide
T&M Ticket Playbook	T&M Workflow
RFI Process Playbook	RFI Process