A change order is a documented amendment that changes the scope, price, quantity, schedule or other terms of an existing order or contract. It creates an approved record of what changed and how the change affects the parties.
When is a change order needed?
Use one when specifications, quantities, delivery dates, responsibilities or pricing change after the original commitment. Minor operational clarification may not require one if it does not alter contractual obligations.
What should a change order contain?
Include the original contract or purchase-order reference, change description, reason, affected lines, price and schedule impact, revised total, effective date and authorized approvals.
How is the financial impact calculated?
State additions and deductions separately. If a $100,000 contract adds $12,000 of work and removes $3,500, the net change is $8,500 and the revised contract value is $108,500.
What happens without approval?
Unapproved work can create disputes over payment, delivery and responsibility. Emergency work should still follow a documented retrospective approval process defined in the contract.
How should changes be controlled?
Use version numbers, delegated authority, budget checks and an audit trail. Update related schedules, invoices and receiving criteria so the systems do not continue using superseded terms.
