What is a Change Order and How Do They Work?


In construction, a change order is when a component of the original scope of work agreed upon by the owner and the contractor changes and effects the contract agreement by adding or deducting a sum amount, or possibly a change in work with no cost association. Therefore the change order is affected by work that was unforeseen at the beginning of the project and the contract cost requires adjustments.  Often a client may decide to change the original plans and suggest an alternate approach to the finished product.  In many cases, such as renovation work, the contractor identifies unforeseen work that must be completed, therefore adding to the contract cost.

The project manager then generates a change order that outlines new work to be completed or in some cases deleted from the original scope of work.  Once this change order is submitted to the owner, it is approved and therefore adjusts the original contract agreement amount.

Many times hidden conditions cause a need for a change order. The causes for a change order range from simple to complex.  The most common reason for a change order originates during the planning/drawing process.  That is why it is always recommended that a certified and experienced architect is chosen that is familiar with your type of project.

Oversights in the planning stage of a new project may cause inadequate details or misrepresentation of details which could then lead to a change order.  This in itself can cause major delays in the construction process and inflate the cost of the job and that why it is important to analyze and verify the owner-provided plans and specifications for accuracy.

Another case might well be that of product substitutions once the project is underway. Many times the owner may want to substitute one product for another after the contract agreement has been executed.  Or perhaps the specified product is no longer available, then the contract and owner must work together and agree on a product not originally specified.  This can often lead to an increase or decrease in price, depending on the product finally selected.  Other times the owner may wish to upgrade personal product changes which will better suit their need or design. 

In any case, communication between the owner and the contractor is essential when changes occur.  CF Jones tries to minimize change orders by communicating all changes to the owner along the way.  Call us today to build your next project.

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