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What is a Change Order?

When a construction business first places a bid on a project, it spells out the services and materials to be provided.
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  • Written By: Shannon Kietzman
  • Edited By: Niki Foster
  • Last Modified Date: 19 November 2014
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A change order is a process used by many businesses, particularly those that provide services to customers. By using it, the business and the client can make alterations to an original business agreement. The process is often used in the construction business.

When a construction business first places a bid on a project, it spells out the services and materials to be provided. The original contract also outlines the design for the project and the projected final outcome. If problems arise during the construction process or the client changes his or her mind about what he or she wants to be done, a change order form must be completed. The form details the new plan, including services, materials, and designs, that the client and the company have mutually agreed upon. It then becomes the valid contract by which the client and the construction company must legally abide.

The change order form may also be used in other service industries. Writers, artists, and computer programmers, for example, may each use such a form in order to change the parameters of an agreed upon project.

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Many business software programs include change order options. These are convenient for the business, as the software programs automatically make changes to the contract in accordance with the agreement. In the case of a construction company, the function makes calculations regarding changes in the supplies necessary and in the cost of the project. These software programs create easy-to-read tables and reports that can be viewed by the construction company and the client to ensure that the details are correct and complete.

By using business software with a change order option, a company can keep better track of changes that have been made to an original agreement. In addition, it fosters better communication between the client and the company, which ensures both parties are aware of expectations and outcomes.

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anon21241
Post 1

can the float in CPM method be used against the contractor if he delayed in project? thanks

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