The Ultimate Guide to Construction Change Orders: Everything You Need to Know in 2025

August 8, 2025
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The Ultimate Guide to Construction Change Orders: Everything You Need to Know in 2025

Construction change orders fundamentally modify contracts for construction projects, appearing 23 times in the AIA’s A201™ General Conditions of the Contract for Construction (2017)(construction change orders). These essential amendments alter a contractor’s scope of work, typically adjusting project timelines, costs, or both. The $1.3 trillion Bipartisan Infrastructure Law presents historic investment opportunities in U.S. transportation infrastructure, making proper change order management more critical than ever.

What are change orders in construction? They serve as formal add-ons or deletions to contracts after the initial scope of work has been agreed upon and signed. Because of the dynamic and complex nature of construction projects, anticipating every challenge from the outset simply isn’t possible. Change orders in construction not only alter project scope and schedule but also affect contractor liability and potentially put payments at risk. Understanding the various types of change orders in construction helps professionals navigate these modifications while minimizing disruptions that can cascade throughout a project’s schedule, scope, and budget. Completing these documents correctly minimizes risk, improves approval chances, and helps contractors get paid faster.

What Are Change Orders in Construction?

A construction change order serves as a formal amendment to modify a construction contract’s scope, schedule, and budget after the initial agreement has been signed. The defines it as “a written instrument prepared by the Architect and signed by the Owner, Contractor, and Architect stating their agreement upon all of the following: the change in the Work, the amount of the adjustment in the Contract Sum, and the extent of the adjustment in the Contract Time” AIA A201™ General Conditions[1]. In simpler terms, it represents a mutual agreement between the owner and contractor to alter the original terms without starting a new bidding process [2].

Definition and purpose of a change order

Construction change orders function as contractual tools that legally modify construction agreements [2]. Essentially, a change order is the industry term for an amendment that changes the contractor’s scope of work [3]. These documents identify, define, and track modifications in a manner acceptable to all parties involved [4].

The primary purpose of change orders is to provide necessary flexibility when adjustments become inevitable. Through these amendments, project sponsors can adapt to unexpected field conditions and circumstances without disrupting the entire project flow [2]. Furthermore, change orders establish clear documentation that protects all parties by specifying exactly what changes are being made, how much they will cost, and how they will affect the project timeline.

Most construction contracts (construction change orders) anticipate the possibility of modifications and include specific language that outlines a process for identifying, processing, and approving change orders [2]. This foresight ensures that when changes become necessary, there’s already an established framework for managing them.

When change orders are typically used

Construction change orders become necessary under various circumstances throughout a project’s lifecycle. Primarily, they address situations that couldn’t have been reasonably anticipated during the initial planning phase.

Common scenarios requiring construction change orders include:

To project scope or features Owner-directed modifications[1]
Unforeseen or differing site conditions discovered during construction [1]
Unexpected underground obstructions or concealed building conditions [1]
Discovery of hazardous materials that affect work progress [1]
Weather delays and events beyond the contractor’s control [1]
Labor disputes, shipping delays, or material availability issues [2]
Necessary corrections due to design document errors or ambiguities [4]
Approved substitutions when specified materials aren’t available [1]
Changes in insurance requirements or settlements of insured losses [1]
Reconciliation of allowances and unit prices at project closeout [1]

Notably, change orders aren’t exclusively used to correct mistakes, although this misconception has contributed to their negative reputation [1]. Indeed, they frequently help optimize projects through value engineering or address unavoidable external factors.

Impact on cost, scope, and schedule

The implementation of change orders significantly influences three fundamental aspects of construction projects. First, regarding costs, change orders typically adjust the contract sum to account for additional or reduced work [5]. These financial implications can be far-reaching, often increasing the project budget beyond initial estimates due to factors like additional labor, extended equipment usage, and potentially higher materials costs [5].

Second, concerning project scope, change orders formally document exactly what work is being added, removed, or modified from the original contract [4]. This documentation ensures clarity about responsibilities and deliverables, preventing disputes later in the project.

Third, with respect to scheduling, construction change orders frequently extend project timelines [5]. Schedule delays resulting from change orders are categorized as either excusable (beyond the contractor’s control) or nonexcusable (within the contractor’s control) [5]. Excusable delays typically justify time extensions, whereas non-excusable delays generally do not [5].

Additionally, construction change orders may inadvertently affect project quality if not properly managed. Constant modifications can lead to coordination challenges among different trade contractors and sometimes compromise overall quality due to rushed executions [5]. Consequently, effective change order management requires careful consideration of how each modification might impact all aspects of the project.

Types of Construction Change Orders in Projects

Construction projects frequently require modifications after contracts are signed. Understanding the various types of (construction change orders) change orders helps project managers handle these alterations effectively. Each type serves specific purposes depending on the nature of the change required.

Additive vs. deductive change orders

The most fundamental categorization of construction change orders involves whether they add to or subtract from the original scope. Additive change orders modify contracts by expanding the scope of work, potentially increasing schedule duration, and adding materials and costs. These modifications might include changing design elements, requesting alternate delivery methods, or increasing labor requirements. Conversely, deductive change orders eliminate design elements or reduce the scope of work, typically resulting in decreased contract prices and sometimes shorter project schedules. Partial Termination for Convenience clauses represent one form of deductive change that removes large sections from the original scope. Both additive and deductive change orders can become sources of friction and litigation in construction projects if not handled properly.

Time and materials (T&M) change orders

Time and materials change orders become necessary when the entire cost of a proposed modification cannot be estimated accurately beforehand. Under this arrangement, contractors track time spent working on the change along with costs for materials and equipment used. The Time and Materials Construction Change Orders clause establishes a process for compensating contractors based on actual time spent and materials used rather than a fixed price. This approach provides flexibility for handling unforeseen work while establishing a clear method for tracking and approving extra costs. T&M change orders typically get issued when work cannot be easily or accurately estimated, or under emergency conditions such as a broken utility line. The final cost remains unknown until after work completion.

Unit-priced change orders

Unit-priced change orders establish a fixed price for each specific unit of work, such as a square foot of flooring or a linear foot of piping. Contractors track and document installed units, which project managers, owners, or architects then verify. Payment follows based on confirmed units installed. These change orders prove particularly useful when quantities might fluctuate. According to the AIA’s General Conditions of the Contract for Construction (A201®-2017), Section 9.1.2 allows for adjusting unit prices when actual quantities significantly deviate from original estimates, ensuring neither party suffers undue financial hardship.

Construction change directives (CCD)

Unlike standard change orders, Construction Change Directives (CCDs) allow work to proceed immediately, even without contractor agreement on cost or schedule impacts. The owner and architect sign CCDs, directing contractors to implement changes prior to reaching agreement on adjustments. CCDs primarily serve as emergency measures when the traditional change order process would delay projects or cause undue risk. After completing the specified work, contractors provide detailed breakdowns of labor and material costs for incorporation into formal change orders. This mechanism keeps projects moving forward while negotiations continue.

Architect’s supplemental instructions (ASI)

Architect’s Supplemental Instructions (ASI) provide additional details or minor changes to contract documents without impacting contract price or timeline. The AIA Document G710™–2017 explicitly states that ASIs cannot change contract sum or time. These instructions help architects perform their interpretive role regarding contract documents and authorize minor changes under Section 7.4 of AIA Document A201™–2017. ASIs can clarify specifications, adjust minor design elements, or provide additional information in response to Requests for Information. Once issued, they become legally enforceable parts of construction documents, requiring immediate attention from contractors.

The Change Order Process from Start to Finish

Construction change orders - Construct Two Group — Construction change orders – Construct Two Group

Implementing effective construction change orders requires a structured process from identification through approval. This systematic approach ensures all project stakeholders remain aligned throughout modifications to the original contract.

Initiating a change: proposal requests and RFIs

The change order process typically begins when someone identifies a necessary modification. This identification might come from the owner, architect, contractor, or consultant. Four primary documents typically initiate changes:

Proposal Requests (PR) – Issued by architects requesting a proposal for a change, often on behalf of the owner or to determine costs for contemplated changes
Architect’s Supplemental Instructions (ASI) – Directives providing additional information within contract scope or for minor changes
Construction Change Directives (CCD) – Instructions directing contractors to implement changes immediately, even before price agreement
Requests for Information (RFI) – Submitted when contract documents are unclear, potentially revealing necessary scope changes

Once identified, the contractor submits a Change Order Request (COR) or Construction Change Orders request documenting cost and schedule implications.

Preparing a change order form (AIA G701, ConsensusDocs)

Standard industry forms like AIA Document G701-2017 or ConsensusDocs 202/795 facilitate consistent documentation. When completing these forms, contractors must include (for construction change orders):

Detailed description of changes or reference to specific exhibits
Original contract sum or guaranteed maximum price
Previous change order adjustments
Current contract sum before this change
Amount of increase or decrease
New contract sum after adjustment
Any changes to substantial completion dates

Approval workflow and required signatures (construction change orders)

After preparation, the construction change order requires signatures from all relevant parties. The AIA G701 typically follows this signing sequence:

Architect signs first
Contractor signs next
Owner provides final approval

This execution indicates agreement upon all terms including scope changes, cost adjustments, and timeline modifications.

Timeline for submission and response for construction change orders

Most construction contracts specify precise timeframes for change order processing. Notification often must occur within 7-14 days of identifying a change. Owner response timeframes should be outlined in the contract, specifying how long they have to accept, reject, or request additional documentation.

Common delays and how to avoid them

According to research, reviewing and responding to each individual RFI costs construction firms an average of $1,080 [6]. Moreover, construction change order costs typically amount to 10-15% of contract value on major projects [6]. Common delay factors include:

Poor documentation of changes
Incomplete or inaccurate pricing information
Multiple revision cycles between parties
Insufficient staffing resources
Coordination difficulties among multiple stakeholders

To minimize delays, maintain comprehensive documentation including photos and drawings, establish standardized forms, create a change order log, and implement clear communication protocols. Most importantly, never begin change work without written approval unless specifically authorized through a CCD.

Legal and Contractual Considerations in 2025

Legal frameworks for construction change orders continue to evolve as industry standards adapt to new challenges. Recent updates to standard contracts reflect this ongoing refinement of how changes are managed legally.

Changes in the work clauses in AIA and ConsensusDocs

For 2025, ConsensusDocs has updated its design-build contracts with several key revisions. The now clarifies that insurance coverage is exempt from the waiver only if insurance actually pays for the loss limited waiver of consequential damages [6]. Meanwhile, interim directives (similar to AIA’s Construction Change Directives) have been revised to clarify that an owner’s directive doesn’t necessarily increase cost or time [6]. Additionally, ConsensusDocs now requires contingent assignment provisions for suppliers as well as subcontractors [6].

and its limitsCardinal change doctrine

The cardinal change doctrine sets boundaries on an owner’s ability to modify contracts. This legal principle prohibits changes that fundamentally alter the project’s nature—essentially creating a new contract [7]. Courts determine whether a change falls within scope, general scope, or beyond general scope by analyzing both magnitude and quality of changes [7]. Multiple smaller changes can collectively constitute a cardinal change through their “cumulative impact” or “death by a thousand cuts” [7]. Nevertheless, this doctrine has limited applicability as courts interpret similar facts differently, as demonstrated in contradictory rulings in the O’Brien and Corrigan cases [7].

Oral vs. written change orders: enforceability

Despite “no oral modification” (NOM) clauses in contracts, Pennsylvania courts have consistently held that oral change orders may still be enforceable [8]. The principle that “a written contract can be modified orally although it provides that it can be modified only in writing” has been upheld in multiple cases [8]. Courts consider equitable factors including estoppel, waiver, and reliance when determining enforceability [8]. Nonetheless, documenting changes through project meeting minutes, emails, or daily reports remains essential for dispute avoidance [8].

Owner and contractor obligations under CCDs

Construction Change Directives (CCDs) create specific obligations for both parties. Owners must have explicit contractual authority to issue CCDs; otherwise, directives may be unenforceable [9]. Contractors typically must proceed with work immediately after receiving a CCD, even without agreement on cost or schedule impacts [9]. However, if a CCD orders work that significantly alters original scope, it might constitute a cardinal change, potentially releasing the contractor from further obligations [9].

Best Practices for Managing Change Orders in Construction

Effective management of construction change orders requires systematic approaches that minimize confusion and maximize project control. Proper techniques enable teams to handle modifications efficiently, reducing disputes and delays.

Documenting everything: photos, drawings, and logs

Comprehensive documentation serves as the cornerstone of successful change order management. Every modification should be recorded in writing, including the scope, reasons, cost impact, and timeline implications [10]. Photos and visual evidence of site conditions prior to changes provide critical context for negotiations. Accordingly, storing all documentation in a centralized, accessible location helps resolve disputes and proves invaluable during project closeout [10].

Using standardized forms and templates

Standardized forms like AIA G701 or ConsensusDocs establish consistency and completeness in documentation [11]. These templates capture essential details including contract references, cost adjustments, and schedule impacts [6]. Initially, utilizing industry-standard forms simplifies review and approval processes while ensuring legal compliance.

Maintaining a change order log

A comprehensive throughout the project lifecycle change order log tracks all modifications [12]. This log should record each change’s status (submitted, approved, in progress, completed), along with relevant details about costs and schedule impacts [12]. Regular updates and reviews of this log enable effective monitoring of project status.

Training staff on change order procedures

Properly trained personnel form the foundation of effective construction change orders management. Regular training sessions [7] should cover:

Contract expectations
Known risk identification
Procedures for flagging scope changes [8]

Avoiding scope creep through clear communication

The key to preventing scope creep lies in establishing clear expectations from project inception [8]. Well-structured contracts should explicitly outline what’s included—and crucially, what’s not [8]. In addition, structured communication channels ensure everyone understands what falls within or outside contracted scope [8]. Proactive project planning functions as an insurance policy against costly misunderstandings [8].

To The Point

Construction change orders remain an inevitable aspect of modern building projects. Throughout this guide, we examined how these contractual modifications fundamentally alter scope, schedule, and budget parameters after initial agreements. Certainly, their proper management proves essential, particularly with trillion-dollar infrastructure investments creating unprecedented opportunities and challenges.

The various types of change orders—additive, deductive, time and materials, unit-priced, construction change directives, and architect’s supplemental instructions—serve distinct purposes depending on project needs. Understanding these differences allows construction professionals to select appropriate modification approaches based on specific circumstances.

Successful change order implementation requires adherence to structured processes. This begins with proper initiation through proposal requests and RFIs, continues with meticulous documentation using standardized forms, and concludes with systematic approval workflows. Project teams must follow established timelines while avoiding common delays that frequently plague construction modifications.

Legal frameworks surrounding change orders continue evolving through updates to industry-standard contracts. The cardinal change doctrine establishes important boundaries, while considerations regarding oral versus written modifications highlight the complexity of contractual relationships. Both owners and contractors must understand their respective obligations, especially when construction change directives demand immediate action.

Effective change order management ultimately depends on following proven best practices. Documentation stands as the foundation of this approach, supported by standardized forms, comprehensive change order logs, well-trained staff, and clear communication protocols. These practices help construction teams prevent scope creep while maintaining project momentum.

Change orders, therefore, should not be viewed negatively but rather as essential tools for adapting to unavoidable project realities. Though they may adjust timelines and budgets, properly managed modifications protect all stakeholders by providing clear documentation and mutual agreement. Construction professionals who master these processes position themselves for success in an industry where flexibility and adaptation determine project outcomes.

Key Takeaways

Master these essential change order fundamentals to protect your construction projects from costly disputes and delays while maintaining clear documentation and stakeholder alignment.

• Change orders are formal contract amendments that modify scope, cost, and schedule – appearing 23 times in AIA A201 conditions due to their critical importance in construction projects.

• Five main types exist: additive/deductive orders, time & materials, unit-priced, construction change directives (CCDs), and architect’s supplemental instructions (ASIs) – each serving specific modification needs.

• Follow structured processes using standardized forms like AIA G701, maintain comprehensive documentation with photos and logs, and ensure proper signature workflows to avoid the average $1,080 cost per RFI review.

• Legal protections include understanding cardinal change doctrine limits and knowing that oral modifications may still be enforceable despite written contract clauses requiring documentation.

• Implement best practices through centralized documentation, standardized templates, change order logs, staff training, and clear communication to prevent scope creep that typically adds 10-15% to major project costs.

Effective change order management transforms inevitable project modifications from potential disasters into controlled adaptations that protect all parties while keeping projects moving forward successfully.

FAQs

Q1. What are the key components of a construction change order? A change order typically includes three main elements: the change in work scope, the adjustment to the contract sum, and the modification to the project timeline. All parties involved must agree on these aspects before proceeding with the changes.

Q2. How common are change orders in construction projects? Change orders are quite common in construction. On average, they account for about 4% of a project’s cost at the beginning, with this percentage remaining relatively stable throughout the project’s lifecycle.

Q3. What is the proper process for implementing a change order? The change order process involves several steps: defining clear procedures, standardizing documentation, performing accurate cost estimation, outlining detailed scope descriptions, executing timely communication, streamlining review and approvals, and documenting everything thoroughly.

Q4. How do change orders impact project costs? Change orders can significantly affect project costs. For major projects, change order costs typically amount to 10-15% of the contract value. Each individual Request for Information (RFI) costs construction firms an average of $1,080 to review and respond to.

Q5. What are the different types of change orders in construction? There are several types of change orders in construction, including additive and deductive orders, time and materials (T&M) orders, unit-priced orders, construction change directives (CCDs), and architect’s supplemental instructions (ASIs). Each type serves a specific purpose depending on the nature of the required modification.

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