Net Cost Change
+$0.00
New Contract Total
$0.00
Schedule Impact
+0 days
12,800+ estimates calculated this month
Construction Change Order Guide
Best practices for documenting, pricing, and managing construction change orders.
What Is a Construction Change Order?
A change order is a formal written amendment to the original construction contract that modifies the scope of work, project cost, or timeline.
- Must be signed by both parties before work begins on the change
- Average residential change order: $1,500–$5,000
- Common triggers: Owner-requested upgrades, unforeseen site conditions, design errors, code requirements
Verbal change orders are the #1 cause of contractor-client disputes. Always document in writing, no matter how small.
Key Takeaways
- Must be signed before work begins
- Average residential change order: $1,500–$5,000
- Written documentation prevents disputes
How to Price a Change Order
Price change orders using cost-plus markup (15–25%) or a pre-agreed unit price schedule.
- Material cost: Actual receipts + 10–20% markup
- Labor cost: Actual hours × burdened rate + 15–25% overhead/profit
- Schedule impact: Add time extension if the change delays the critical path
- Equipment/rental: Pass through at cost + 10%
Include a change order clause in every original contract specifying the markup percentage and approval process.
Key Takeaways
- Standard markup on changes: 15–25%
- Include material receipts + labor hours
- Pre-agree on markup % in original contract
Essential Change Order Template Elements
Every change order must include 7 key elements to be legally enforceable and prevent disputes.
- Change order number (sequential tracking)
- Description of change (specific scope, not vague)
- Cost breakdown (materials, labor, markup — itemized)
- Schedule impact (days added or subtracted)
- Revised contract total
- Both parties' signatures and date
- Reference to original contract
Key Takeaways
- 7 essential elements for enforceability
- Itemized cost breakdown required
- Both signatures + date mandatory
How to Use This Calculator
Enter Project Details
Fill in the project name, client name, original contract amount, and change order number to establish the baseline for this change.
Describe Each Change
Add line items for each change with a description, type (addition, deletion, or modification), cost impact, and schedule impact in days.
Add the Reason
Document the reason for the change order. Common reasons include owner requests, unforeseen site conditions, design changes, or code requirements.
Print or Save as PDF
Preview the formatted change order showing the net cost change, new contract total, and schedule impact. Print or save as PDF for signatures.
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Frequently Asked Questions
What is a change order in construction?
A change order is a written document that modifies the original construction contract. It records changes to the scope of work, contract price, and project schedule. Change orders must be signed by both the owner and contractor before the changed work begins to avoid disputes.
When should you issue a change order?
Issue a change order whenever the project scope changes from the original contract. Common triggers include: owner-requested additions or modifications, unforeseen site conditions (hidden rot, bad soil, asbestos), design errors or omissions, and code requirement changes. Never perform changed work without a signed change order.
How do you price a change order?
Price a change order the same way you price original work: materials + labor + equipment + subcontractors + markup. Most contracts specify the markup percentage allowed on change orders (commonly 10-20%). Include any schedule impact costs. For deductions, credit the owner at cost minus the same markup percentage.
What should a change order include?
A complete change order should include: the change order number, project and contract reference, a detailed description of the change, the reason for the change, cost impact (additions and deductions), schedule impact in days, the new contract total, and signature lines for both parties.
Can a contractor refuse a change order?
Yes. A contractor can refuse to perform additional work if the change order terms are not acceptable. However, the contractor cannot unilaterally change the contract price or scope. Both parties must agree to the change order terms. If there is a dispute, the contract language and local laws govern the resolution process.
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