Mastering Change Orders in Construction Management Contracting: Guidance for Project Owners

Let’s be honest – no construction project ever goes 100% exactly as planned. Design tweaks, site surprises, and shifting priorities are part of the game. The question isn’t if you’ll have change orders—it’s how you’ll handle them.

A 2023 Turner & Townsend survey found that 62% of project owners issued at least three significant change orders per project, but 28% reported that these changes ultimately improved project outcomes.

Why Change Orders Happen (and Why They’re Not Always Bad)

• Unforeseen site conditions (hello, mystery pipes!)
• Owner-driven design changes
• Regulatory requirements
• Value engineering opportunities

Sometimes, a change order can actually help you avoid bigger problems later. When a construction manager spots an issue early and acts fast, it can save both time and money compared to fixing things halfway through the project.

The Change Order Process in Management Contracting

1. Initiation: The need for a change is identified—by anyone on the team.
2. Pricing: The CM coordinates with subs to price the change, providing detailed breakdowns.
3. Approval: The owner reviews and approves (or rejects) before work proceeds.
4. Documentation: Everything is logged, tracked, and reported.

Construction Management Contracts vs. Traditional Contracts

In a lump-sum contract, change orders are often a source of friction and affects profit for the builder. So the negotiation and redrafting can take significant time leading to extended timelines.

With CMC, the open-book approach means the project owner sees the real costs and it doesn’t eat into construction manager’s profit. The negotiate is more value based than money based.

Cost Tracking and Documentation in a Necessity

Don’t rely on handshake deals. Every change should be:

• Documented in writing
• Priced out in detail
• Tracked against your overall budget

How to track budgets live? Modern CMs use digital tools that let you see the impact of changes in real time. Swift Checkin has a real-time budget tracking tool along with automated timesheets, smart scheduling and more.

According to a 2024 Autodesk report, digital tracking reduced budget overruns by 19% on average

Real-World Example: Navigating Big Changes

During a recent library renovation, asbestos was discovered mid-project. Thanks to a robust CMC process, the team priced and approved the remediation in days—not weeks—keeping the project on track and avoiding a potential $400,000 delay.

The Takeaway

Change orders are bound to happen on any project, but that doesn’t mean things have to get out of hand. A good construction manager is there to make smart calls, keep a close eye on costs, and make sure the work keeps moving forward—even when plans shift unexpectedly.