Cost · October 9, 2026 · 8 min read

Construction Change Orders: Why They Happen, What They Cost, How to Cap Them

A change order is a signed agreement between owner and contractor that changes the contract after it is signed: it adds, removes or alters work, and adjusts the price, the schedule or both. Every renovation has some. What separates a controlled project from a painful one is how many there are, what causes them, and whether each one is priced and approved before the work happens.

Key takeaway. A change order formally changes scope, price and time after the contract is signed. Its cost is the direct cost of the work plus the contractor's agreed markup plus any extra time on site, and it rises the later the change is made. On clinic renovations most change orders come from five predictable sources, and most of them can be reduced before construction starts.

What Is a Change Order?

A construction change order is the paperwork that keeps the contract true to the job. When the owner wants something different, when the site turns out to be different from what the drawings assumed, or when an authority asks for something nobody planned for, the contract no longer describes the work being done. The change order fixes that, in writing, with both signatures.

A complete change order says:

• What changes — a description specific enough that someone who was not in the meeting could build it.
• Why — owner request, concealed condition, design coordination, authority requirement.
• The price adjustment — an addition or a credit, with the breakdown behind it.
• The time adjustment — the number of working days added to the schedule, or a statement that there is none.
• Signatures — owner and contractor, and the consultant where the contract requires it.

A change order is not a failure. It is the mechanism that lets a contract adapt to a real building without anyone arguing about it later.

Change Orders vs. Change Directives

Most commercial work in Canada is contracted on the Canadian Construction Documents Committee's CCDC 2 stipulated price contract or a form based on it. Its Part 6 (Changes in the Work) gives the owner two ways to change the work, explained clearly in this summary of CCDC 2's General Condition 6:

• A change order is used when the owner and contractor have agreed the price and time adjustment. The contractor submits a proposal, the owner accepts or negotiates it, and both sign.
• A change directive is used when the work has to proceed before the price is agreed. The contractor proceeds promptly, and the adjustment is later valued on the contractor's actual cost plus an allowance for overhead and profit, then recorded in a change order.

The change directive exists so a disagreement about money does not stop a job. It is also more expensive to administer, because every hour and invoice has to be tracked. Use it when you must, not by default. If your contract is not a CCDC form, read its changes clause before construction starts — it governs everything in this article.

How a Change Is Priced

A contractor pricing a change builds it up from the same components as the original bid:

• Direct labour — the hours each trade needs, including any demolition of work already installed.
• Material — what the change needs, less anything from the original scope that is no longer used.
• Subtrade quotes — for most changes, the mechanical, electrical or millwork subtrade prices its part and the general contractor carries it.
• Markup — the contractor's percentage for overhead and profit, applied on top of cost. Good contracts state this rate in advance, often with a different rate for the contractor's own work and for subtrade work.
• Time-related costs — supervision, site facilities, equipment rental and insurance for any days the change adds.

Credits work in reverse, but rarely at full value. Material already ordered, fabricated or delivered cannot always be returned, and the contractor's overhead does not shrink because one item came out. Expect a deleted item to credit less than it would have cost to add.

Our article on how contractors price a commercial project explains how the original bid is built, which is the baseline every change is priced against.

What a Change Costs Beyond the Price

The number on the change order is rarely the whole cost. A change also costs:

• Schedule. A change on the critical path — a wall that moves before drywall, a revised plumbing layout before slab work — pushes everything after it. Extended time means extended supervision and site costs, and for a clinic it means a later opening.
• Sequence. Work done out of order is slower. Reopening a finished ceiling to add a duct costs more than installing the duct before the ceiling closed.
• Re-approvals. A change that affects permitted drawings may need a permit revision, and the inspector may want to see it before work continues.
• Attention. Every change takes the project manager and consultant away from running the job.

This is why timing matters more than almost anything else. The same change made on paper during design, made after tender, and made after the work is built can cost very different amounts.

The 5 Most Common Causes of Change Orders on Clinic Jobs

1. Concealed conditions. What is behind the walls, under the floor and above the ceiling of an existing space: undersized drain lines, abandoned services, structural surprises, and hazardous materials such as asbestos. In an older building, a hazardous materials survey before renovation moves the biggest of these from a mid-job change to a known line in the bid.
2. Equipment changes after rough-in. Dental chairs, imaging units, sterilisers and compressors each come with vendor requirements for power, water, drainage, venting and blocking. Change the model after the rough-in is set and the rough-in changes too.
3. Owner design changes during construction. Moving a wall, adding an operatory, changing a finish once the space can be walked. Some are worth it; all are cheaper on paper.
4. Uncoordinated drawings. Architectural, mechanical and electrical drawings that each work alone but collide in the ceiling. A clinic's ventilation, plumbing and medical gas or vacuum lines make this more likely than in an office fit-out.
5. Authority and landlord requirements. Building inspector comments, health authority conditions, fire department requirements and landlord base-building rules that surface after pricing.

The dental office renovation checklist sets out the order of decisions that heads off most of these on a dental project.

A Sample Change-Order Log

A change-order log is a single running list of every proposed and approved change. It is the document that lets an owner see the true contract value at any point. The entries below are illustrative only — they show the format, not a real project — and price columns are deliberately left as the basis of pricing rather than figures.

Keep the log in a shared file, update it weekly, and add three totals at the bottom: approved changes, pending changes, and remaining contingency.

How to Cap Change Orders

You cannot eliminate change orders on a renovation. You can keep them small, priced and predictable.

• Finish the design before tender. Every decision left open becomes a change later, priced without competition.
• Investigate before pricing. Hazardous materials survey, scanning of slabs, opening up suspect areas, and a review of base-building drawings.
• Lock equipment selections before rough-in. Get the vendor's installation requirements into the drawings, not just the model number.
• Agree the pricing rules in the contract. State the markup percentages, the labour rates and the time allowed to price a change.
• Require written approval before work proceeds. No verbal instructions. A change directive where the work cannot wait.
• Carry an owner-held contingency. Hold it yourself, separate from the contract price, and track it against the log.
• Name one decision maker. Changes that need three partners to agree take three times as long, and time is a cost.
• Ask for a sample change order at tender. A bidder's sample shows how they will price and document changes before you are committed.

Conclusion

A change order is how a construction contract keeps up with a real building. The cost of each one is direct cost plus agreed markup plus time, and that cost rises the later the decision is made. On clinic renovations, concealed conditions, equipment changes, design changes, uncoordinated drawings and authority requirements cause most of them, and each can be reduced before construction starts. Agree the pricing rules in the contract, keep a weekly log, and approve nothing verbally. If you are planning a renovation and want the change-order rules agreed before the first wall comes down, our commercial renovation page covers how we run this work.