Agency Operations

Change Order

A formal document that modifies the original project agreement when scope, timeline, or budget changes. Change orders protect agencies from scope creep by making scope changes visible and billable.

Definition

A change order is a formal document that modifies the original project agreement—typically the Statement of Work or contract—when project scope, timeline, deliverables, or budget needs to change. It documents what's changing, why it's changing, and how it impacts cost and schedule. Change orders are essential tools for managing scope changes professionally and ensuring that additional work is properly authorized and billed. Change orders serve multiple purposes. They make scope changes visible and intentional rather than letting them happen invisibly through scope creep. They protect agencies by ensuring additional work is authorized before it's performed, preventing situations where you do extra work and then struggle to get paid for it. They protect clients by ensuring they understand the implications of requested changes before approving them. And they maintain project documentation, creating a clear record of how the project evolved over time. The change order process typically begins when a scope change is identified—either requested by the client or necessitated by circumstances. The agency documents the change, estimates the additional cost and time required, and presents this to the client for approval. Once approved, the change order becomes part of the project agreement, and work proceeds. Some agencies require written approval before starting change order work, while others allow verbal approval with written confirmation to follow. Effective change orders are clear and specific. They describe exactly what's changing, why it's necessary, what the impact is on cost and timeline, and what the new deliverables or outcomes will be. They reference the original agreement to show what's being modified. And they're presented professionally, framing changes as opportunities to improve the project rather than problems or extra costs. Many agencies struggle with change orders because they're uncomfortable saying "that will cost extra" or they want to be accommodating. But change orders aren't about being difficult—they're about maintaining project integrity and ensuring fair compensation. When presented properly, clients understand that change orders protect both parties and ensure projects stay on track. Common mistakes include not using change orders at all (letting scope creep happen invisibly), being too informal (relying on emails or conversations instead of formal documents), not getting approval before starting work (doing extra work and then struggling to get paid), and not tracking change orders systematically (losing documentation and creating confusion). The most successful agencies treat change order management as a core process, training their teams to recognize scope changes early and handle them professionally.

Frequently Asked Questions

When should agencies use change orders?

Use change orders whenever project scope, deliverables, timeline, or budget changes from the original agreement. This includes client-requested additions, necessary scope adjustments, timeline changes, or any work outside the original Statement of Work.

How do you present change orders to clients?

Present change orders clearly and professionally, explaining what's changing, why it's necessary, and the impact on cost and timeline. Frame changes as opportunities to improve the project. Get written approval before starting change order work to protect both parties.

What happens if a client refuses to approve a change order?

If a client refuses to approve a change order for necessary work, you have options: perform the work within original scope (if possible), defer it to a future phase, or negotiate an alternative solution. The key is not performing unbilled work outside the original agreement.

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