Change orders (variations)

Definition

Change orders (variations) formalise additions to or deductions from the originally agreed scope of work, with corresponding adjustments to price and schedule. In Dutch construction practice this is "meer- en minderwerk", governed largely by contract and standard conditions such as the UAV 2012 rather than a single statute. Clear procedures for authorising, pricing and approving changes prevent disputes over unauthorised extra work.

Example

When the client asks for an extra floor, the parties issue a change order setting the additional price and a revised completion date.

Why this is a business risk

Unauthorised or undocumented change orders are a leading source of construction and IT project disputes. Contractors who perform extra work without a signed change order often cannot recover the additional costs. Clients who give verbal instructions then dispute the scope face inflated claims they cannot disprove because there is no written record.

How to manage it

• Require all scope changes to be agreed in writing before work starts -- a signed change order that specifies scope, price and revised timeline.
• Define in the contract who has authority to issue and approve change orders; a project manager's verbal instruction should not bind the client unless the contract says so.
• Track the cumulative cost and schedule impact of change orders throughout the project so the overall contract value and completion date remain transparent.
• Store each signed change order alongside the main contract so the complete scope history is traceable in one place.
• Set a milestone for any revised completion date created by a change order and update it in your contract tracking system immediately.