Change order entitlement: the owner’s review checklist
When a contractor’s change order request lands on an owner’s desk, the review that follows is usually improvised. It shouldn’t be. Construction claims practice has a settled framework — entitlement, notice, and quantum — and walking every request through it produces faster, fairer, and far more defensible answers.
The framework in one paragraph
Entitlement asks whether the contract allows recovery at all: is this changed work, or work the contractor already owed? Notice asks whether the claim was raised in the time and form the contract requires. Quantum asks whether the amount is right: pricing basis, markups, and arithmetic. The three are independent — a contractor can be entitled and still have the number wrong, or have a fair number and no entitlement. Review boards see exactly this split: claims that win on entitlement and fail on quantum.
The checklist
- Identify the contractual basis. Which clause does the request rely on — a changes clause, differing site conditions, owner-directed change, delay provision? If the request doesn’t say, that’s the first question back.
- Cross-check scope against the documents. Is the claimed “extra” work already shown in the plans or specified in the specs? A bid-day miss by the contractor is not a change in the work. This is the single most valuable check and the most often skipped.
- Check notice: time and form. Most contracts set a window for claiming changed work and prescribe how. Late or defective notice matters — notice provisions exist so the owner can investigate conditions while they still exist, and they are routinely enforced.
- Classify the change. Owner-directed changes are usually straightforward on entitlement and become a quantum review. Constructive changes — claims that owner conduct or document defects changed the work — need the entitlement analysis in full.
- Audit the pricing basis. Lump sum breakdown, unit prices, or time-and-materials? Does it match what the contract says changed work is priced on, and are labor rates and equipment rates the contract rates?
- Apply the markup caps. Overhead and profit percentages are usually capped by the contract, often at different rates for self-performed versus subcontracted work. Requests using “standard” markups above the cap are a routine, recoverable finding.
- Do the arithmetic. Extended totals, subtotals, markup math. Simple errors survive into executed change orders more often than anyone admits.
- Treat time separately. A time extension request needs schedule analysis — was the critical path actually impacted? It’s legitimate to resolve cost and defer time pending a time-impact analysis, and to say so explicitly.
Answer in writing, every time
The quiet risk in change order administration is silence. Courts have reminded the industry that a change order can be approved by conduct or acquiescence — an owner who stays silent while disputed work proceeds, or pays without reservation, can end up bound even where the contract prescribed a formal process. The habit that protects you is mechanical: every request gets a timely written determination — approve, reject, or approve in part — citing the clauses it stands on.
Make it systematic
None of this is exotic; it’s just work that has to happen the same way every time, under schedule pressure, for every request. That consistency is what ProjectOpsIQ Change Orders is being built to provide: the contract set indexed once, every request walked through this checklist automatically, and the determination letter drafted with the citations in place.