What Is a Change Order?

If you're new to the construction game, you've probably heard the term \"change order\" thrown around, but what exactly is it? Simply put, a change order comes into play once you've signed a contract with a general contractor (GC) or project owner. That contract locks in the scope of work you agreed to do for a set price. But as every experienced contractor knows, no project ever goes exactly as planned.

When Do You Need a Change Order?

A change order happens when something outside of your original scope of work comes up. Maybe the project owner decides they want to add more work, or maybe something unexpected is uncovered on the job site. Either way, a change order allows you to formally adjust the contract price and scope.

Change orders aren’t just about getting more money, though. Sometimes, they actually reduce the contract amount. Let’s say you bid a job assuming you’d be installing 1,000 feet of pipe, but the design changes and now you only need to install 800 feet. That’s called a \"deductive change order,\" and it means giving money back because the work has decreased.

How Do You Submit a Change Order?

Handling a change order isn’t as simple as grabbing a Sharpie and scribbling out the numbers on your original bid. You need to follow a proper process. Typically, that means:

1. Breaking down the costs. Whether you’re adding or removing work, you need to provide a detailed breakdown of unit costs.
2. Writing a formal request. This is called a \"request for change order.\" You’ll describe what’s changing in the scope of work and attach your cost breakdown.
3. Getting approval. The GC or owner will review your request and (hopefully) sign off on it.

Common Reasons for a Change Order

Most change orders fall into a few categories:

• Design changes – The project owner or architect decides to modify the original plans.
• Unforeseen conditions – You run into something unexpected, like underground utilities that weren’t marked or rock excavation that wasn’t accounted for.
• Material substitutions – The owner or GC requests different materials than what was originally specified.

What If the GC Pushes Back?

It’s not uncommon for a GC or project owner to push back on a change order, especially if they don’t like the price you’ve submitted. If you’re confident in your pricing and know that’s what it’ll take to get the work done, stand your ground. Most of the time, they won’t want to bring in another subcontractor because that creates warranty and scheduling issues.

That being said, always read your contract carefully. Know what the exit clauses are in case things go south. If a GC wants you off the job, they’ll find a way to do it, so always maintain good communication and keep things professional.

Making Change Orders Easier

Some GCs will have their own forms for submitting change orders, while others leave it up to you. Regardless, it's always a good idea to keep your own records. Using a system like ProfitDig makes it easy because you can generate a change order in the same format as your original bid. That way, everything looks clean and professional.

Final Thoughts

Change orders are just part of the business. They can be a hassle, but they also protect you from doing extra work for free. Know the process, document everything, and make sure you get paid for the work you do.

For more construction business tips, check out ProfitDig.com. If this article was helpful, give it a share or drop a comment. We appreciate the support!

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