Change Orders are one of the most common, and most costly, parts of any construction project. They're also one of the most misunderstood.
If you've ever been on a job where out-of-scope work got done but never got paid, or where a COR sat in someone's inbox for six weeks while the budget quietly expanded, this guide is for you.
A Change Order is a formal modification to a construction contract that documents a change in scope, cost, schedule, or all three. When work goes beyond what the original contract covers, whether it's different materials, added scope, or unforeseen site conditions, a Change Order is how that work gets priced and approved.
Change Orders exist on both sides of the GC/sub relationship. A specialty contractor submits a Change Order Request (COR) to the GC when scope expands. The GC reviews it, rolls it into their own Potential Change Order (PCO), and submits an official Change Order (CO) to the owner for approval. Once the owner approves, the CO becomes part of the contract.
Simple in theory. Messy in practice.
"Most everything was email, sent whenever, to whoever, with whatever attached. Forecasting meant searching your inbox, hoping you caught everything, or cross-checking logs you knew weren't complete."
Heather Gould, Senior Project Engineer, Barton Malow
A COR is a formal request submitted by a subcontractor or supplier to the GC for compensation on out-of-scope work. It is a proposal, not an approval. Work documented in a COR is not billable until it works its way through the full approval chain.
A PCO is the GC's internal tracking entry for a change that has been submitted but not yet approved. It represents cost exposure on the GC's forecast, money that may be owed but hasn't been executed yet.
A CO is the formally executed contract modification, signed by the owner or their authorized representative. No money changes hands until the CO is signed. The CO supersedes the original contract for the scope it covers.
A COR (Change Order Request) is a subcontractor's request to the GC for compensation on out-of-scope work. A Change Order (CO) is the approved, executed contract modification between the GC and owner. A COR initiates the process; a CO completes it. The gap between the two is where most projects lose money.
Change Orders are a normal part of construction, not a sign something went wrong.
The most common causes are:
No matter the cause, every Change Order follows the same path: scope identified, pricing requested, COR submitted, approval obtained.
A T&M (time and materials) ticket is a field document that captures actual labor hours, crew members, equipment, and materials used on work that can't be priced in advance.
T&M tickets, also called T&M Tags, are filled out on the jobsite as the work happens and signed by the GC's superintendent as real-time confirmation.
T&M work differs from a standard COR because the cost isn't known upfront. It's common for emergency repairs, exploratory work, or any scope where the full extent can't be determined until you're in it.
"Trying to get through a stack of tickets like that every week on 10 different projects was crazy."
Noah Quest, Director of Operations, Shamrock Painting
The Change Order process fails for one consistent reason: no shared source of truth. The GC has their log. Each specialty contractor has theirs. The owner has whatever they've been sent. None of them match.
The data reflects this:
When CORs live in email threads, they get lost in revision cycles, buried in handoffs, and missed in forecasts. By the time someone catches the gap, it's often too late to fix it cleanly.
"Trying to keep track of all that backup through emails or paper tickets was a huge headache. You might not even realize something was missed until months later, when a subcontractor comes back with costs you weren't expecting."
Malachi Hays, Project Manager, Barton Malow
Well-managed Change Orders share a few traits:
"Without having a platform like Clearstory, you have to go to every trade contractor, get a list, make sure we all agree on the numbers, and it can be a really arduous task for trade engineers."
Lana Sarchiapone, Senior Engineer, Turner Construction
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Change Orders are unavoidable. Chaos isn't.
Good documentation protects the specialty contractor who did the work. Real-time visibility protects the GC's forecast. Transparency protects the owner's budget and the relationship with their builder. The process isn't complicated. It just requires everyone in the chain working from the same information.