A construction change order, also known as a Construction Change Directive (CCD) or variation order, is a document that outlines modifications to the original construction contract. These changes may include alterations to the scope of work, materials, timelines, or costs, and are typically initiated by the client, architect, or contractor during the construction process.

Contractors should keep records of all change orders to maintain transparency, track project modifications, and ensure accountability for any adjustments made to the original contract scope, schedule, or budget. These records serve as documentation for legal and financial purposes and help in resolving disputes that may arise during or after the project.

An acceptable change order percentage typically ranges between 5% to 10% of the original contract value. However, the specific acceptable percentage can vary depending on factors such as the complexity of the project, the industry norms, and the client's preferences.

To mitigate change orders in construction, thorough planning and communication are essential. This includes detailed initial project specifications, regular communication with all stakeholders to address potential changes early, and implementing robust change management processes to assess the impacts on budget and schedule before making modifications to the project scope.

Follow these steps to create a change order:

1. Meet with all involved parties to define the change, ensuring clarity and minimizing errors.
2. Determine impacts on budget and schedule, assessing the necessary adjustments.
3. Select a construction change order template or create one from scratch.
4. List the amendments and associated costs in detail within the change order.
5. Provide a thorough description outlining the reason for the change.
6. Double-check for accuracy, ensuring all details are correct.
7. Share the change order with the client and keep them updated on the project's progress.
8. Obtain the client's signature or negotiate further if needed.
9. Store the change order securely, including physical and digital copies with backups.

Try Houzz Pro's construction change order management software or explore our full guide on how to create a change order for construction, then try our free template.

With a subscription to Houzz Pro’s construction contract change order management software, you also get access to these other project management tools that have your back when changes occur:

• Project schedule
• Client dashboard
• Task management
• Daily logs

You can find more information about what features are included with each of our plans here.

When you subscribe to Houzz Pro’s construction change order tracking software, you gain premium access to our support team. That means you get an exclusive phone number that directs you to an onshore team member and you get pushed to the top of the queue.

You also get personalized on-demand onboarding support, showing you how to properly use the specific features you want, when you want, to help get your business up and running with Houzz Pro. We also have a wide variety of help articles available in our Help Center and in-depth how-to videos on our YouTube channel.