Project change orders

The change order records changes to the original scope of the project. Usually this means additional work, sometimes less. The difference between the original scope and the changes must be clear in the project's reporting. The change must also become part of the contract.

Common causes for change orders are:

• The project's work was incorrectly estimated.

• The customer or project team discovers obstacles or possible efficiencies that require deviation from the original plan.

• The customer or project team cannot complete their required deliverables within budget, and additional money, time, or resources must be added to the project.

• During the course of the project, additional features or options are perceived and requested.

• If the contractor must add work items to the original scope at a later time to achieve the customer's demands, a fair price for the work items and fees must be added for the materials and labor.

• Extreme weather conditions cause delays or require additional work to complete construction.

In all these situations, it is important that the customer and contractor agree on the change. The change order functionality provides the opportunity for a formal approval activity:

1. Estimate the costs of the change in the different cost types: Resources, Material, Expenses, and Equipment.

2. Request an approval through the salesperson responsible for the project or the person responsible for the project, usually the project manager.

3. Embed the change in the project as a separate task, linked to the element or activity work breakdown structures.

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