Change directive vs. change order: who can tell you to do different work

A change order is signed by owner, contractor and architect before the work. A change directive orders the work first and settles price and time later. How to keep both from becoming a claim.

Every change on a job is a fork: stop and negotiate, or keep working and settle later. Standard contracts give each fork a document. AIA's best practices guidance is blunt about the first: only the parties to the contract — the owner and the contractor — may approve changes to the contract sum or contract time; the architect has no authority to authorize changes, and typical contracts require contractor, owner and architect to all sign change orders. The architect's role is advisory: whether the change conforms to the design intent, at the same standard of care as the original documents.

When agreement has to wait: the change directive

Some changes cannot wait for a three-signature negotiation — the wall is open, the crew is standing. The construction change directive exists for that: the work proceeds while price and time are settled afterward. It keeps the job moving, but it converts certainty into a future negotiation, which is why the same AIA guidance recommends keeping an in-house record of all construction change directives and the history of all drawings — traceable through revision blocks — both to control the cost of the job and to defend future claims.

The discipline that keeps changes boring

• Nothing changed without a document: verbal direction is a claim in embryo; the change log starts the day the direction arrives, not the day the invoice is disputed.
• Cost and time priced before signing: a change order priced from the same unit costs as the schedule of values is a short meeting, not a long letter.
• Directives tracked to settlement: open directives have an owner, an aging and a target resolution, or they become the next dispute.
• Everything in the job record: the change, its backup, its approval and its cost effect in the same place as the change order log.

Changes are revenue, not drama

Managed well, changes are paid scope: documented, priced, approved, billed. Managed loosely, they are the most expensive free work a contractor does. When the change log lives in the same system as the budget, the certificates and the collections, every change has a number and a status. That is the operation an ERP for construction companies runs for a contractor, implemented around the way each company works.