A change order is a written, signed modification to a construction contract. It documents added, deleted, or altered scope, the dollar impact (increase or decrease to contract value), and the schedule impact (days added or subtracted from completion). Change orders require both contractor and owner signatures to be enforceable.
Change orders are where contractors most commonly lose money. Verbal authorization, undocumented work, late delivery of CO documents, and unprofessional formatting all reduce approval rates and increase write-offs. A disciplined CO process — capture the request the same day, ship a customer-facing document within 24 hours, collect signature within 72 hours, never start work before signature — closes the gap between requested scope and paid scope.