Change Orders: When to Accept, When to Push Back, and How to Negotiate

Every construction project experiences change. Unforeseen conditions arise, owner priorities evolve, and design documents rarely anticipate every field reality. The problem is not change itself—it is unmanaged change.

Owners who treat every change order as either automatically valid or automatically adversarial lose leverage either way. Effective owners apply structure, consistency, and judgment to every change request.

First, Understand What Kind of Change You Are Dealing With

Not all change orders are created equal. Before reacting, classify the change.

Legitimate Changes (Generally Acceptable)

These typically include:

• Owner-directed scope additions or revisions
• Differing site conditions that meet the contract definition
• Design changes issued after bid
• Regulatory or third-party requirements imposed mid-project

These changes are usually compensable—but still negotiable.

Questionable Changes (Require Scrutiny)

Common examples:

• Ambiguous scope being reframed as "extra work"
• Productivity impacts without clear causation
• Work resulting from coordination failures
• Contractor means-and-methods issues

These often deserve pushback until entitlement is clearly demonstrated.

Non-Compensable Changes (Often Rejected)

Typically include:

• Work already required by the contract
• Corrective work due to contractor error
• Impacts tied to known project risks
• Inefficiencies unrelated to the change

Owners frequently overpay in this category due to time pressure.

When to Accept a Change Order

Accepting a change order is appropriate when:

• Entitlement is clear under the contract
• The scope is well-defined
• Pricing is reasonable and supported
• Schedule impacts are justified and documented

Acceptance does not mean passive approval. Even valid changes should be evaluated for cost realism and schedule credibility.

When to Push Back

Push back when:

• The contractor cannot clearly tie the change to a contract clause
• Pricing relies on broad assumptions rather than measured quantities
• Schedule impacts are claimed without critical path analysis
• The request arrives late with minimal documentation

Pushback is not obstruction. It is a normal part of enforcing the contract and protecting the project.

How to Negotiate Change Orders Effectively

Negotiation should be structured, factual, and consistent—not reactive.

1. Separate Entitlement from Pricing

First determine whether a change is owed. Only then negotiate how much.

2. Require Cost Transparency

Request:

• Labor hours by trade
• Equipment types and durations
• Material quantities and pricing
• Markups per the contract

Unsupported lump sums should be the exception, not the rule.

3. Evaluate Schedule Impacts Independently

Do not accept time extensions without:

• Updated schedule logic
• Identification of critical path effects
• Consideration of concurrency

Time is leverage. Treat it accordingly.

4. Use Timing to Your Advantage

Where appropriate, consider:

• Time-and-materials with a not-to-exceed cap
• Partial approvals to maintain progress
• Deferred resolution of disputed amounts

The goal is momentum without surrendering control.

A Common Owner Mistake

Many owners approve change orders simply to "keep the project moving." While well-intentioned, this often rewards poor documentation and invites additional claims. Discipline early reduces conflict later.

Managing Change as a System, Not an Event

Effective owners manage change orders through a defined process:

• Clear submission requirements
• Consistent review criteria
• Documented decisions
• Regular reconciliation of cost and schedule impacts

This shifts change orders from emotional flashpoints to manageable transactions.

The Owner's Leverage—If Used Properly

Owners retain leverage as long as they are informed, consistent, and timely. Change orders do not have to derail budgets—but only if they are treated as contractual mechanisms, not emergencies.