The construction change order process

A change order is the document that formally amends the construction contract after it is signed. It adjusts the contract sum, the contract time, or both, and once executed it is the new agreement rather than a note about the old one.

The sequence

Something surfaces: an unforeseen site condition, a design clarification, a code interpretation, or an owner decision to change scope. The contractor prices it, usually as a proposal or a change order request, and the architect reviews it for scope and reasonableness.

Then it gets negotiated, which is the step that takes the time. Price, schedule impact, and whether the work was arguably already in the contract are all live questions, and the third one is where relationships get tested.

When the parties agree, the change is executed. On projects using AIA contract forms that means Document G701. The American Institute of Architects describes G701 as the form used for implementing changes in the work agreed to by the owner, contractor, and architect, with execution of a completed G701 indicating agreement upon all terms of the change, including any change in the contract sum or guaranteed maximum price and in the contract time. Three signatures, one instrument, and the contract has moved.

Where the owner's budget falls behind

The moment a change order is executed, the project's cost position has changed. The budget frequently does not learn this for weeks.

The reason is that the change order lives in the construction team's world, and the owner's budget often updates from invoices, which arrive later. So the sequence runs: change agreed in March, executed in March, first billed in May, visible in the owner's spreadsheet in June. For three months the project reported a cost position that everyone on the job site knew was out of date.

The fix is not complicated and it is not a tool. Executed change orders update the approved changes column on the day they are signed, which moves the current budget and, with it, the forecast at completion. If the change is being absorbed by contingency, that drawdown gets logged in the same motion, with the amount and the approver. Two entries, made once, and the budget stops lagging reality.

A note on the ones that get skipped

Small changes handled on a handshake are the ones that accumulate. Individually none of them justifies paperwork. Collectively they are frequently the difference between a project that came in near budget and one that did not, and because they were never recorded there is no way afterward to say where the money went. If a change moves cost or time, it gets written down, whatever its size. Those entries roll up into the cost buckets that make a portfolio legible.