Change Order Management: Get Paid for Extra Work
Unbilled extra work is one of the most common ways profitable projects turn unprofitable. The crew does the work because it is easier than arguing, nobody documents it, and at closeout the client refuses a charge they never approved. Change order management is the discipline that prevents this.
Define What Counts as a Change
Ambiguity is the root cause. A change order is required whenever any of these happen:
Write this list into your contract and review it at the preconstruction meeting. Clients accept change orders far more readily when they were told during the sales process that changes happen.
Stop Work Until It Is Approved
The single most effective rule: no extra work begins without written approval. Verbal approval is not approval. This feels rigid the first few times and pays for itself immediately.
The corollary matters just as much — turn change orders around fast. A crew idled for three days waiting on paperwork costs more than the change. Same-day issuance and mobile approval keep the rule practical.
Price Changes the Same Way You Price Bids
Changes should carry the same overhead and profit as base work, plus a realistic allowance for disruption. Field labor performed out of sequence is genuinely more expensive than planned labor, and pricing it at bare cost trains clients to treat changes as free.
Include on every change order:
1. Description of the change and why it is needed
2. Cost breakdown at your standard markup
3. Schedule impact in days
4. Revised contract total
5. Signature and date
Photograph the Condition
For discovered conditions — rot, undersized service, failed substrate — a photo attached to the change order ends the argument before it starts. Clients approve what they can see.
Handle Allowances Explicitly
Allowance overages are technically changes and are frequently mishandled. Show the allowance amount, the selected product's actual cost, and the difference. Make the math visible and the conversation gets easy.
Track the Cumulative Effect
Each change looks small. Six of them can shift a project's margin and schedule materially. Keep a running log showing original contract, approved changes, current contract value, and cumulative schedule impact. Review it at every client meeting so nobody is surprised at the end.
Train the Field
Most missed change orders originate in the field, where a superintendent says "sure, we can do that" without realizing it is out of scope. Give crews one instruction: anything not on the plans goes to the project manager before it gets built.
Frequently Asked Questions
What if the client refuses to sign a legitimate change?
Stop that scope, document the refusal in writing, and continue base contract work. Building unapproved work is how disputes become losses.
Should small changes get paperwork?
Yes, even if the amount is minor. Consistency is what makes the process credible when a large change arrives.
How fast should a change order be issued?
Same day when possible. The value of a change order decays quickly once the work is done.
Can change orders damage the client relationship?
Poorly explained ones can. Clear documentation, photos, and early warning generally have the opposite effect — clients read them as professionalism.
BidBuild keeps change orders, approvals, and revised budgets attached to the job, so field crews, the office, and the client are working from the same contract value at all times.