What Is a Change Order in Construction?

What happens to the contract when the scope changes mid-job?

A change order is a contractually executed change to the project's scope, price, or schedule.

What it is

A change order is a formal, signed change to the contract: added or removed scope, a price adjustment, a schedule extension, or all three. It is distinct from a field change or a time-and-materials ticket because it modifies the contract itself. Once executed, it adjusts the schedule of values and flows into the pay application.

Why it matters

Unbilled or unexecuted change orders are lost margin. Work done on a verbal change with no executed order is work you may not get paid for, and a change that never reaches the SOV bills against the wrong contract value. Change order discipline is where profit leaks or holds.

How it works

1. Price and document the change

   Capture the added scope, price, and schedule impact before the work is done.
2. Get it executed

   A change order is not real until it is signed; a verbal yes is not an executed change.
3. Adjust the SOV

   The executed change order adds or adjusts schedule-of-values lines.
4. Bill it on the pay app

   Once in the SOV, the change is billable on the next pay application.

Common mistakes

How Scaftra handles it

Scaftra captures the change, carries its price and schedule impact, and on execution flows it into the schedule of values so it bills on the next pay application, on the same project record as the original contract.

Related terms

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