What is the difference between a change order and a change directive?

Agreement. A change order is signed by all parties before the work proceeds: the owner, contractor, and usually the architect have agreed on the scope, the price, and any time extension, so there is no ambiguity about what was authorized. A construction change directive is the owner directing the contractor to proceed with changed work before the price and schedule impact have been agreed, so the work can start without waiting on negotiation. The directive keeps the job moving; the change order closes the loop once the parties settle the cost and time. A directive that is never converted into a change order is a common source of dispute.

Who can approve a change order?

Only the parties the contract names, which is why unauthorized direction is so dangerous. A change order typically requires the owner and the contractor to sign, with the architect preparing and often also signing it. What matters is that the person giving the instruction actually has authority to bind the owner. A field representative, a tenant, or a junior staffer telling a crew to add work does not create a valid change order, and a contractor who proceeds on that instruction may never get paid. Disciplined contractors confirm the authority and get the signature before the work starts, not after.

What should a change order include?

Enough to be an enforceable record on its own. A complete change order states what is changing and why, the adjustment to the contract price, any adjustment to the contract time, the revised contract sum and completion date, and the signatures of the authorized parties. Strong change orders also reference the document that triggered the change, such as an RFI answer or a bulletin, and attach the pricing backup. The goal is that if the project ends up in a dispute years later, the change order alone shows what was agreed, what it cost, and how it moved the finish date.

Construction Glossary · Change Management

The ChangeOrder

No project finishes as drawn. The change order is the written instrument that turns an informal "just add it" into an enforceable change to scope, price, and time.

Definition

A change order (CO) is a written amendment to a construction contract that modifies the scope of work, the contract price, the schedule, or some combination of the three. It is signed by the owner, contractor, and usually the architect, and once executed it becomes part of the contract, formally changing what was agreed.

From event to executed amendment

On our $12.0M project, a differing site condition adds $150K and five days. It travels four steps before it is real, and only the last one actually changes the contract.

Identify

An event changes the work: a differing site condition, an owner request, an RFI answer that adds scope. It is logged as a potential change order.

Price

The contractor prices the cost impact and the time impact, with backup, and submits a proposal for the change.

Negotiate

The owner and design team review the proposal, question the pricing, and the parties settle on a number and a time extension.

Execute

All parties sign. The change order becomes part of the contract, revising the contract sum and the completion date.

Contract $12.0M+ CO $150KRevised $12.15M

Change order vs directive vs PCO

Three instruments, three levels of agreement. Only the change order actually modifies the contract on signature.

	What it is	Signed before work?	Changes the contract?
Change Order (CO)	Executed amendment to scope, price, time	Yes, by all parties	Yes, on signature
Change Directive (CCD)	Owner directs changed work before price is agreed	No, issued without contractor agreement	Not yet; converts to a CO later
Potential CO (PCO)	A logged, priced proposal for a possible change	No, it is a proposal	No, until approved as a CO

The pipeline before a CO is covered in potential change orders & directives.

How POD tracks change orders

POD keeps an editable change-order log and reconciles it, separating changes to the client contract from changes to subcontracts. From there, each approved client change can be applied to the current project budget and the earned-value baseline, line by line, so the revised contract sum and the plan everything measures against move with the executed changes rather than drifting from them.

Change order management guide

Frequently asked questions

Every change starts as a maybe

Before a change order is signed, it is a potential change order or a directive. That pipeline is where the money and the exposure live.

Potential Change Orders Back to the Glossary