How to handle change orders and scope creep

Two different problems

Change orders are legitimate: the customer wants something different, or the building revealed a condition nobody could see. These should be priced and documented.

Scope creep is what happens when change orders are not written. The work changes, the price does not, and nobody remembers agreeing to anything.

The cure for both is the same: a bid with a clear scope and exclusions (covered in writing a bid that wins) plus a habit of writing changes down the moment they come up.

What a change order must contain

1. Job address and reference to the original contract or bid date.
2. A number — Change Order #1, #2, so the paper trail is obvious.
3. Description of the change, written plainly.
4. The reason: customer request, or unforeseen condition.
5. Price change: added cost, or credit if scope is being removed.
6. Schedule impact: "adds 2 working days."
7. New contract total.
8. Both signatures and the date.

It can be one page, or a photo of a signed sheet from a duplicate book. What matters is that it exists before the work does.

Price the change like a small job, not a favour

The same cost stack applies: labor hours at your burdened rate, materials, overhead for the hours, then margin. Two adjustments in your favour:

• Set a minimum. Any change order carries a minimum of one or two hours regardless of the actual time. Interruptions cost more than the task.
• Charge for disruption. A change that forces re-sequencing, an extra supply run, or a second mobilisation should carry that cost explicitly.

Some contractors carry a slightly higher margin on change work than on the base bid. That is reasonable — it is unplanned, unscheduled work you did not compete for.

The script that keeps it friendly

The awkwardness comes from surprise, not from money. Remove the surprise by handling every request the same way, in the moment:

"Absolutely, we can do that. It's outside what we priced, so let me put a number to it tonight and send it over — once you okay it I'll add it to the schedule."

Nobody is offended by that sentence. What causes conflict is doing the work silently and producing a bigger invoice at the end.

Set the expectation at the start

Say it at the pre-start walkthrough, before anyone is emotional: "Changes are completely normal. Here's how I handle them — I'll write a quick change order, you approve it, and we go. Nothing gets added to your bill without your signature." Customers find this reassuring, not bureaucratic, because it also means their bill cannot grow behind their back.

Unforeseen conditions: stop, photograph, quote

Rotten sill plate, knob-and-tube wiring, no subfloor under the vinyl. The sequence is always:

1. Stop work in that area.
2. Photograph it clearly, before you touch anything.
3. Tell the customer the same day — do not save it for the end of the week.
4. Quote the repair as a change order, with the photo attached.
5. Resume only after approval.

The photograph does more work than the paperwork. A customer looking at a picture of wet framing is not arguing about $600; they are grateful you found it.

When to say no

Not every change should be accepted. Decline when the request compromises the work you are warranting, when it requires a trade or licence you do not hold, or when it would push the schedule into a commitment you have already made elsewhere. "I'd rather get you the right person for that than do it half-well" protects your reputation better than saying yes.

The verbal-approval trap

"Just do it, I'm good for it" is where most unpaid work begins — not from dishonesty, but from two people remembering a conversation differently a month later. If a customer will not wait for paper, send a text: "Confirming: adding the second outlet, $180, adds no time. Reply OK and I'll get it done." A text thread is written approval.

Track the cumulative total

Show the running contract total on every change order. A customer who signed for $14,500 and receives a $19,200 invoice is upset even if they approved every step, because nobody was adding it up. Doing the addition for them keeps trust intact and gets you paid on time.

The payoff

Contractors who write change orders consistently report the same two things: they make more money on the same jobs, and they argue with customers less. The paperwork is not the burden — the unpriced favours are.

Price your changes the same way you price the original job with the bid calculator, so an extra day of work carries its overhead and margin just like the rest of the contract.