- [Instructor] A change order in construction is a direction from an owner or customer that alters the original plan of construction for a project. A simple example of this would be when a customer or owner planned to have two sinks in a lavatory, but then decided to add a third one after construction has already began and the contracts for construction have already been issued and executed. Change orders may also be known as change directives. Sometimes rather than adding additional material or work on a job, customer or owner decides to delete some work.
This is also a change order, and most of the same rules apply. Sometimes change orders or change directives only change the conditions of work. For instance, the customer may ask you to accelerate the schedule so the job can be completed quicker. By doing so, that may cost more money to do the shift work, or overtime work, and even increase the inefficiency of just going faster. It is now the task of the contractor or subcontractor who is faced with the change to price up the additional work and submit it to the owner for approval.
The components of a change order are very similar to that of a construction estimate. They have material takeoffs, labor costs, subcontract costs, material quotations, equipment costs, and direct job costs, as well as overhead and profit markups.