What is a Change Order?
A change to the work, or change order, is an amendment that is
permitted to occur through contract administration. A change order can
change contractor tasks, standards or methods, and as a consequence may
require adjustment to the contract price or contract schedule for the
An agency may execute a change order only if the contract contains
specific change provisions and must execute the change order according
to those provisions. The contract administrator must be aware of the
allowable change provisions in the contract, which may include one or
both of the following two types:
- Change request – A mutually agreed upon change
in the contracted work within the general scope of a contract. A change
request may be initiated by the agency, the contractor or both parties
and must be mutually agreed to by both parties.
- Change order – A unilateral written order or
directive issued by the agency to the contractor requiring a change in
the contracted work within the general scope of a contract.
While the differences between the two may be subtle, the effect
they have in a contract is vastly different. For instance, in less
complex public improvement projects a change request may be effective to
control changes and cost overruns in projects. However, in complex
construction projects where action is required and a delay in
decision-making may cost money or cause rework, a change order may be
When to Use Change Orders
A change order is generally only used in construction and public
improvement projects. Change orders require specific contract change
provisions to be used. Contract administrators may only use a change
order if the contract provisions allow for it.
All public improvement, and other contract types that anticipate a need for change orders, must have change provisions that:
- detail the scope of the changes allowed.
- provide details of the pricing mechanism to be used to compute cost associated with the change.
- authorize the agency to issue change requests and/or change orders.
- provide a procedure that addresses contractor claims for additional time or compensation.
An agency should use a change order when it seeks to change the
services, materials, equipment, labor and incidentals necessary to
successfully complete any individual item or the entire contract. An
agency should establish fiscal controls to ensure that authorizations
for changes to the work performed by the contractor are managed
according to contract amendment requirements for the specific
How to Execute Change Orders
The process for executing a change order is specified in the change
provisions of the original contract. A contract administrator must
review the change provisions of the contract, and if a change order is
allowed, the administrator must follow the specified process.
may have established internal restrictions and specific delegations for
authorizing change orders, including dollar limitations. Contract
administrators should review agency limitations prior to initiating a
Once fully executed, the change order must be provided to the
agency or DAS procurement representative and filed in the contract file
along with any supporting documentation.
Note: If at any point a change order, or the aggregate of change
orders, causes the value of the original contract and all amendments to
exceed $150,000, the agency must execute an amendment to the original
contract. The agency must submit the original contract and all
amendments to the Attorney General for the required legal sufficiency