Change Orders And Margin Erosion: How Construction Leaders Can Protect Project Profitability

Many construction projects lose profit margin because changes to the original contract are poorly managed. One of the most important tools for addressing and documenting these changes is the change order, a formal amendment to an existing construction contract. Change orders typically modify the original scope of work, the contract price, materials, the project schedule, or a combination of all four. While change orders are often unavoidable, they can be a significant source of cost overruns, schedule disruption, and disputes when not handled effectively.

Why Change Orders Matter

Change orders are a common feature of construction projects because changes typically arise during the course of a project.