What is a Construction Field Change Order?

A construction field change order, by its very name, is still a type of construction change order. The next question you might have is whether a field order is different from a change order. Let’s dive in and make this clear for you.

Construction field orders are most likely to be found on government contracting jobs (but sometimes on private work) and their primary purpose is to expedite projects without giving up control. Here’s how they work.

Let’s say that the town of Big City USA is building a new road and it has anticipated the cost will be $1,000,000.00, which is the engineer’s estimate, but it knows that there may be changes that come up and must be dealt with, and that is specified in the contract documents. Typically, there is a sequence to change orders, beginning with an RFI (request for information), going on to a COR (change order request) and ultimately to an OCO (owner change order). In Big City USA, the town’s mayor must sign off on formal change orders, upon receiving city council approval, and that of the director of public works. But it takes some time.

However, Big City USA has a very competent construction manager (CM) overseeing the job. The city government trusts the CM to directly handle the more routine & obvious issues, on a case-by-case basis, so it has an allowance in the contract of $50,000.00, which it has designated as “Field Change Orders”. It is a budgeted item, so it is part of the $1,000,000.00 total, but there is no obligation to spend it. If the project were completed without need for any changes whatsoever, the total of the project paid out would be only $950,000.00, because no field orders were executed. In the sample case, Big City USA’s CM evaluates the issue, and she can use it, if warranted.  

What normally happens is that the city will eventually write a change order at the close of the contract to account for this $50,000.00, and this is a formal change order stating that there is a $50,000.00 deduction, in this case, to the $1,000,000.00 contract, and the amount of the final contract is changed to $950,000.00. Again, the construction field change order is there to expedite things, it carries the same weight, approval-wise, as a formal change order. The important thing for us to know is that when the CM sends you a written notice that you have been given a field change order, you are approved to proceed with the work..

To give a different example from the Big City USA project, let’s say that there was $100,000.00 of extra work, of which $50,000.00 was awarded by the CM using her authority with the field change order, but another $50,000.00 of work was required, as well. In that example, the contractor would be billing for $950,000.00, plus $50,000.00 on Field Order #1 and an additional $50,000.00 on the city’s formal Change Order, for a total of $1,050,000.00.

In summary, a construction field change order is an allowance and is a part of a contract, if that work is performed. In other words, it may happen. A construction change order is a document acknowledging that a change to the contract amount has happened.

Having efficient change order processes are important no matter how much money is at stake. $50,000 to a large contractor can be equivalent to $500 to a small contractor. Investing in software to automate and simplify the change order process can have profound effects on your profitably. 

For contractors doing small jobs such as home remodels and improvement projects, Trak Changes is the perfect solution to streamline the change order process. It speeds up approvals, centralizes client communications, and improves documentation.