The Ten Commandments of Change Orders

The Ten Commandments of Construction Change Orders Every Project Team Must Know

Are you stomping ants while elephants run wild? Are you straining at gnats and swallowing camels? That is how Petty Coach Schmidt introduces their Ten Commandments of Construction Change Orders, and it is exactly the right framing. Most project teams spend enormous energy on small inefficiencies while losing thousands or hundreds of thousands of dollars on change orders that were handled poorly, undocumented, or simply never collected.

Jason Schroeder came across this framework at one of Petty Coach Schmidt’s Micro Monday training sessions and immediately knew it needed wider reach. These are not complex legal principles. They are the practical discipline that separates project teams who manage changes well from the ones who give away their margin without realizing it.

Commandment One: Know Thy Contract

You cannot do well with changes if you cannot identify how the change departed from the original agreement. The original contract is the rulebook. If you do not know it, you are playing a game without knowing the rules.

Jason’s go to example here is project manager Ryan Young, someone he considers among the best he has ever worked alongside. Ryan’s discipline was to go through every contract and distill the key provisions the entire project team needed to understand. Not just the PM. Not just the executive. The whole team. He would put contract inclusions and exclusions into a binder so that when questions came up in the field about whether something was in scope, the answer was already organized and accessible. That discipline protected the project from arguments that should never have happened.

Know your contract before a change request hits your desk. Know it before a trade partner asks whether something is covered. The contract is always the starting point.

Commandment Two: Do Not Give Away Thy Leverage

The owner wants the project complete, including all changes. You want compensation and to deliver value. Both parties have something the other needs. But if you give the owner what they want without securing what you deserve, you have surrendered your position permanently.

Ryan Young’s practice here was also instructive: nothing got done in the field without a PCO number, a potential change order tracking identifier logged into the project management system. T&M tickets, contingency exposures, scope additions: all of it had a number and a home in the system before the work began. And the team never started change work without financial approval. That project finished on time and within budget. The connection is not coincidental.

Leverage exists in the moment when both parties still need each other. Once you have performed the work and accepted a vague assurance of resolution later, the leverage is gone. Protect it before you spend it.

Commandment Three: Never Perform Change Work Without a Written, Signed, Authorized Change Order

This one gets its own emphasis because it gets violated so often. Not a verbal agreement. Not an email chain that implies approval. Not a handshake on the job site. A written, signed, authorized change order. Period. Under any circumstance. For any reason.

Jason lived this standard as a superintendent and says it is both possible and the right way to operate. The temptation to start work first and sort out the paperwork later is how projects lose money that never comes back.

Commandment Four: Depend Not on the Attorney to Bail You Out

Use attorneys for advice. Build your competency in managing changes so that attorney involvement is never necessary. Most change order disputes that end up in legal proceedings started as management failures that compounded over time. Fight your own battles by not creating the conditions for battles in the first place.

Commandment Five: If Thou Ask Not, Thou Receive Not

If you do not request full compensation, you will not receive it. There are almost no cases where payment is made for items left out of a change request. Owners do not volunteer to pay for things you forgot to bill.

Jason spent years watching project teams leave money on the table because they were afraid to ask for the full amount. His experience was that when the request is right, when it reflects actual cost and actual time and can be supported, owners say yes the large majority of the time. Not because owners are generous but because a well prepared, reasonable change request reflects a professional team managing the project with discipline. Ask for what you are owed. Prepare the support. Submit the request.

Commandment Six: Time Is Money

Change orders cover both cost and time. Read the contract rules on both. Most project teams are disciplined about pricing the direct cost of a change and negligent about quantifying and requesting the time impact. Schedule delays, productivity impacts, extended general conditions: all of these flow from changes and all of them have legitimate value in a properly prepared change request.

Know the rules. Price the full impact. Request both.

Commandment Seven: Surprise Not Thy Owner

Owners have budgets and management options. The earlier they know about a potential cost increase, the more options they have to address it. The later they find out, the fewer options they have and the more damage is done to the relationship.

Jason tells the story of a project team that absorbed cost after cost, trying to handle it internally, and finished the project significantly over budget without telling the owner in real time. The project was beautifully built. The owner was furious about the financial surprise, and that team never worked with that owner again. Jason was assigned to the follow on project because that team had burned the relationship.

Here is what that looks like in practice:

• Early notification of a potential change, even before costs are fully quantified, gives the owner time to plan
• Regular updates on the financial trajectory of the project protect the relationship
• A surprise at closeout is not a billing issue, it is a trust issue, and trust issues end relationships

Communicate early. Communicate often. Owners are business partners, not adversaries.

Commandment Eight: Be Persistent

Persistence gets results. Change order management requires consistent follow through. Submit the request, follow up, push through the administrative friction, and keep going until the change is approved and the money is collected. Most project teams do excellent work on the field side and then let change orders age out through inaction.

Commandment Nine: Thy Bargaining Power Equals That of Others

Your bargaining power in a change negotiation is equal to the owner’s unless you have done one of three things: failed to know the rules, thrown away your leverage, or chosen not to use your leverage. All three are self inflicted. The contract gives you rights. Know them. Protect them. Use them.

Commandment Ten: Thy Job Is Not Finished Until the Money Be Collected

The change order is not closed when the work is done. It is not closed when the paperwork is submitted. It is closed when the money is collected, the lien waivers are exchanged, and the account is reconciled. Closeout is where change order management most often breaks down.

Jason describes creating a streamlined system for change order closeout after seeing a project where the team had done excellent work but left open change orders at the end of the job and created friction with an owner who had been otherwise satisfied. The system reconciled all outstanding items between the GC and all trade partners, ensuring that when the team demobilized, everything was collected and resolved.

Nobody makes a lot of money on change orders. The best outcome is to get them done correctly and collect what is owed. The worst is to do the work, let it drag, and never collect.

If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow. Change order discipline is part of the same professional standard as schedule management and site cleanliness. It is not a back office concern. It is project management.

The Challenge for Your Next Project

Print these ten commandments and put them somewhere visible for your project team. Then audit your current change order process against each one. Where are you strong? Where are you giving away margin without knowing it?

As the old legal principle holds: a right not asserted is a right not protected. Every change on your project that is not properly documented, tracked, priced, and collected is money that belongs to your company being left behind. Stop stomping ants. Manage the elephants.

On we go.

Frequently Asked Questions

What is the single most common change order mistake on construction projects?

Starting change work before receiving a written, signed, authorized change order. Once the work is done and the owner has what they wanted, your leverage is gone and collection becomes exponentially harder.

How do you handle a situation where the owner is pressuring you to start work before the change order is approved?

Document the request in writing, state your position clearly, and do not start the work. If the owner insists, escalate to your project executive or legal team. The pressure to start work early is almost always about the owner’s schedule preference. Your financial protection is your responsibility.

When is the right time to notify an owner about a potential change?

As early as possible, even before you have a fully developed cost. A preliminary notification that says “we have encountered a condition that may result in a change, we will have pricing to you by this date” gives the owner time to plan and demonstrates professional management.

How do you ensure trade partners are managing their change orders properly so GC closeout goes smoothly?

Set expectations in the subcontract and reinforce them throughout the project. Require PCO numbers for all potential changes. Establish a regular cadence for change order reconciliation, not just at closeout. The GC’s change order health is directly connected to how well trade partners are managed in this area.

What does a good change order closeout process look like?

All open PCOs reconciled and closed or withdrawn. All approved change orders with signed documentation and collected payment. All lien waivers exchanged. A clear accounting of what was billed, what was collected, and what remains, with zero open items before the team demobilizes.