Change Order Documentation: Protecting Your Right to Payment#

Executive Summary#

Change orders document modifications to the original scope of work that entitle subcontractors to additional compensation. Proper documentation of changes—capturing what changed, who authorized it, and what additional work was required—protects the subcontractor's right to payment. Poor documentation often results in disputed or unpaid change work. This guide explains how to document changes effectively throughout the change order process.

The Context for ICI Subcontractors#

Scope changes occur on virtually every construction project. Site conditions differ from drawings. Owners request modifications. Design issues require resolution. Coordination with other trades creates changes. For subcontractors, these changes represent both risk and opportunity—risk of uncompensated work if changes are not documented, and opportunity for additional revenue if documented properly.

The purpose of a change order is to establish the authority to perform additional work and receive additional payment. A purchase order authorizes the original scope. A change order authorizes modifications to that scope. Without approved change orders, the subcontractor may perform work they cannot bill for.

The Change Order Process#

Identifying Changes#

Change documentation begins with recognizing that a change has occurred or is being requested:

Owner-directed changes: The owner or their representative requests a modification to the work. This might come through the general contractor as a request for pricing, or as a directive to proceed with changed work.

Design changes: Drawings or specifications are revised, requiring different work than originally bid.

Field conditions: Actual site conditions differ from what was shown in contract documents, requiring different approaches.

Coordination changes: Conflicts with other trades or systems require modifications to the planned work.

Deficiency corrections: Work by others that affects the subcontractor's scope requires additional effort.

Any of these situations may constitute a change that warrants additional compensation. The key is recognizing changes when they occur.

Documenting the Change#

When a change is identified, documentation should capture:

What changed: Describe specifically how the work differs from the original contract scope. Reference drawing numbers, specification sections, or other contract documents that defined the original scope.

Why it changed: Document the reason for the change—owner request, design revision, field condition, coordination issue. Include any documentation received (RFIs, revised drawings, directives).

Who directed or authorized it: Document who requested the change or directed the work. Name, company, date, and method of communication (verbal, written, email).

When it was identified: The date the change was discovered or communicated. Timely notification may be contractually required.

Where it applies: The specific location, area, or system affected by the change.

Photos and visual documentation: Before and after photos, photos of conditions discovered, photos showing the changed work.

Providing Notice#

Many subcontracts require timely notice when changes occur. Contract language might specify:

Notice within a certain number of days of discovering a change
Written notice to specific parties
Particular formats or forms for change notices

Failure to provide timely notice as required by the contract may waive the right to additional compensation—even if the change clearly occurred.

A subcontractor might discover a field condition that requires additional work. Even if the entitlement to extra payment is clear, failing to provide notice within the contractually required timeframe could forfeit that entitlement.

Pricing the Change#

Change order pricing documents the cost of the changed work:

Labor: Hours required, classifications, rates. For prospective change orders (pricing before work), this is estimated. For changes where work has already occurred, this should be actual documented hours.

Materials: What materials are required, quantities, unit costs. Include quotes or invoices where available.

Equipment: Any equipment costs associated with the change.

Subcontracted work: Costs from lower-tier subcontractors for their portions of the changed scope.

Markup: Contract-allowed markup for overhead and profit. Many contracts specify allowable markup percentages for change order work.

Pricing documentation should be detailed enough to justify the amounts requested. A lump-sum price with no backup invites questioning and negotiation.

Obtaining Approval#

The change order process seeks approval before work is performed where possible:

Change Order Request (COR): Submit documentation of the change and proposed pricing
Review: GC and/or owner reviews, may negotiate pricing
Approval: Written authorization to proceed
Execution: Perform the changed work
Billing: Invoice for approved amount

This sequence protects the subcontractor—work is not performed until compensation is agreed.

When Work Must Proceed Before Approval#

Sometimes circumstances require proceeding with changed work before formal approval:

Emergency situations requiring immediate action
Directives to proceed pending resolution
Schedule constraints that do not allow time for negotiation

When work must proceed without prior approval, documentation becomes even more critical:

Document the directive: Who directed the work to proceed? What did they say? When?

Reserve rights: Provide written notice that you are proceeding under direction but reserve the right to compensation for the additional work.

Track costs carefully: Document actual labor hours, materials, and other costs as work proceeds.

Continue pursuing approval: Do not let the change order languish. Continue pressing for formal approval and resolution.

Documentation Best Practices#

Contemporaneous Documentation#

Documentation created at the time of events carries more weight than documentation created later:

Daily reports noting changes or directives
Photos taken when conditions are discovered
Emails or written communications saved when received
Time records showing labor on changed work

Documentation reconstructed days or weeks later is less reliable and more vulnerable to challenge.

Specific and Detailed#

Vague documentation provides weak support. Specific documentation is stronger:

Weak: "Extra work requested by GC"

Strong: "On November 15, 2024, John Smith (Site Superintendent, ABC General Contractors) verbally directed our foreperson Mike Johnson to relocate ductwork insulation from the planned routing shown on Drawing M-401 to accommodate the revised electrical conduit routing shown on RFI #45. This change required removal of 85 LF of installed 2" fiberglass insulation and reinstallation on the new routing, plus additional 35 LF of new insulation to complete the revised path."

Photos as Evidence#

Photos provide visual evidence that supports written documentation:

Conditions as discovered (before any work)
Work in progress
Completed changed work
Reference to location (showing context)

Photos should be dated and organized by job and by change. Hundreds of unnamed photos in a camera roll have limited value.

Chain of Authority#

Document the chain of authority for changes:

Who has authority to direct changes under the contract?
Did the person who directed the change have that authority?
Was the change communicated through proper channels?

Work directed by someone without authority may not be compensable. Understanding who can authorize changes—and documenting that those people did authorize—protects the subcontractor.

Written Confirmation of Verbal Directives#

Verbal directives should be confirmed in writing:

"Per our conversation on the jobsite today, November 15, 2024, you directed us to proceed with relocating the ductwork insulation from the original routing on M-401 to accommodate the revised electrical conduit routing per RFI #45. Please confirm this direction. We will submit change order pricing for your review."

This creates a written record of verbal communications and gives the other party opportunity to correct any misunderstanding.

Common Documentation Failures#

Failing to Recognize Changes#

The most fundamental documentation failure is not recognizing that a change has occurred. Work gets performed, costs are incurred, but no one identifies that the work exceeded original scope.

This often happens gradually—small additions that individually seem minor but collectively represent significant unbilled work.

Delayed Documentation#

Waiting to document changes until billing time creates problems:

Details are forgotten
Documentation is incomplete
Written records do not exist
The other party disputes the account

Document changes as they occur, not weeks or months later.

Insufficient Detail#

Change order requests with insufficient detail invite rejection or negotiation:

"Extra work: $15,000" provides no basis for evaluation
Detailed breakdowns with hours, rates, and material costs support the request

Performing Work Without Documentation#

Proceeding with changed work without any documentation—no notice, no written confirmation, no tracking of costs—makes recovery difficult.

Even when directives are verbal and urgent, take time to create basic documentation: a quick email, a photo, a note in the daily report.

Letting Changes Accumulate#

Submitting one large change order covering months of accumulated changes is less effective than addressing changes promptly:

Details become uncertain over time
The accumulated amount creates sticker shock
Review becomes more difficult

Address changes as they occur. Submit change order requests promptly.

Contract Provisions to Understand#

Notice Requirements#

Review contract provisions governing change notice:

How many days to provide notice?
To whom must notice be sent?
What form must notice take?
What happens if notice is late?

Pricing Methods#

Contracts may specify how change work is priced:

Agreed lump sum
Time and materials with specified rates
Unit prices from the bid
Markup percentages allowed

Understanding these provisions before changes occur enables compliant pricing.

Documentation Requirements#

Some contracts specify documentation requirements for changes:

Forms to be used
Backup required
Certification requirements

Non-compliant submissions may be rejected regardless of merit.

Dispute Resolution#

When changes cannot be agreed, what happens?

Mediation or arbitration requirements
Claims procedures and timelines
Right to stop work vs. obligation to proceed

Understanding dispute provisions helps when changes cannot be resolved through normal processes.

Protecting Your Rights#

Provide Timely Notice#

Even when confident of entitlement, provide formal notice as required by the contract. This preserves rights that could otherwise be waived.

Document Thoroughly#

Create contemporaneous documentation of changes—what, when, who, why. Take photos. Confirm verbal communications in writing.

Track Costs#

For changes where work proceeds before approval, track actual costs carefully. This provides the basis for pricing and supports claims if disputes arise.

Pursue Resolution#

Do not let change orders sit unresolved. Continue pursuing approval and payment. Changes that languish become harder to resolve.

Know Your Contract#

Understand contract provisions governing changes. Comply with notice requirements, pricing methods, and documentation standards.

How Appello Supports Change Order Management#

Appello enables subcontractors to document changes directly from the field. The mobile app allows forepersons to capture photos, notes, and time information when changes occur—creating contemporaneous documentation that supports change order requests.

Change orders in Appello connect to job financial records, linking the approved additional scope to billing and job costing. This integration ensures that approved changes flow through to invoices and that job profitability reflects the full scope of work.

Conclusion#

Change order documentation protects the subcontractor's right to payment for work beyond original scope. The process requires recognizing changes when they occur, documenting them thoroughly and promptly, providing required notices, and pursuing approval and resolution.

Subcontractors who document changes effectively recover compensation for additional work. Those who fail to document may perform work they cannot bill for—absorbing costs that should have been paid by others.

The discipline of change documentation is not administrative burden—it is protection of earned revenue.

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