Change Order — definition
Formal document recording an agreed modification to contract scope, cost or schedule after the original contract has been signed.
Change orders typically arise from scope clarifications, buyer-requested modifications, unforeseen site conditions or design changes discovered during execution. Each change order is generally priced using previously agreed unit rates where available, or negotiated separately, and requires formal approval before work proceeds.
Why it matters to industrial buyers
Uncontrolled or undocumented changes are a common source of cost overrun and schedule delay, making formal change order processes important for cost control.
Key reference points
Common triggers
Scope ambiguity, unforeseen site conditions and buyer-requested modifications are frequent sources of change orders.
Governance link
Approval authority for change orders above a set value is commonly reserved for the project steering committee.
Commonly confused with
Scope of supply
Scope of supply defines the original contractual deliverables; a change order documents an agreed modification to that original scope.
How it is used in practice
Unforeseen ground conditions require additional foundation work, formalised through a change order that adjusts contract price and schedule.
Frequently asked questions
Can work proceed before a change order is signed?
This is generally discouraged, since unapproved work can create disputes over cost responsibility; many contracts require written authorisation first.
How are change orders typically priced?
They are commonly priced using existing contract unit rates where available, or negotiated based on a cost breakdown for new scope.
Go deeper on the platform
Related terms
Risk Register
Documented log of identified project risks, including likelihood, impact, ownership and mitigation actions, maintained and reviewed throughout project execution.
Scope of Supply
Contractual description of the equipment, services, deliverables and responsibilities a supplier is obligated to provide under an agreement.
Project Governance
Structure of roles, decision rights, reporting lines and controls established to oversee an industrial project from approval through completion.
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Reference content only. Global B2B Group is independent of equipment manufacturers and financing institutions; definitions are provided for education and do not constitute engineering, financial or legal advice.