If you ask most commercial owners where their project went over budget, the answer is almost always the same: change orders. Not the big ones — the obvious scope additions you approved with full knowledge of the cost. The small ones. The ones that seemed reasonable in the moment. The ones that came in fast, during a busy stretch, when you were focused on something else.
Change orders are the single largest source of uncontrolled cost on commercial construction projects. And they are also the area where an experienced owner's representative earns their fee many times over.
What a Change Order Actually Is
A change order is a written amendment to the construction contract that modifies the scope of work, the contract price, or the schedule — or all three. Some change orders are legitimate and unavoidable. Unforeseen site conditions. Owner-requested modifications to the design. Errors or omissions in the contract documents that require field resolution.
But many change orders are not what they appear to be. And without someone reviewing them with the knowledge and authority to push back, owners end up paying for things they shouldn't.
The Three Change Order Problems I See Most Often
1. Work that was already in the contract. This is the most common and most costly problem. A contractor submits a change order for work that a careful reading of the contract documents shows was already included in the original scope. The owner doesn't know the contract well enough to recognize it. The change order gets approved. The contractor gets paid twice for the same work.
2. Inflated pricing. Even when the change order is for legitimate additional work, the pricing is frequently inflated. Labor rates padded. Material quantities overstated. Overhead and profit markups applied on top of subcontractor markups that already include overhead and profit. Without someone who knows construction costs in the Los Angeles market, there's no way to know whether the number is fair.
3. Bundling and speed. Contractors often submit change orders in batches, during busy periods, with short turnaround requests. The implicit pressure is: approve quickly or risk delaying the project. Owners who feel that pressure — and most do — approve without adequate review. This is not an accident.
What I Do With Every Change Order
When I'm representing an owner on a commercial construction project in Los Angeles or anywhere in Southern California, no change order gets approved without going through the same process:
- Review the contract documents to confirm the work isn't already included in the original scope
- Verify the field conditions that triggered the change order actually exist
- Analyze the pricing line by line — labor, materials, equipment, subcontractor costs, and markups
- Compare against current market rates and my experience with similar work
- Negotiate where the pricing is unsupported
- Document everything in writing before recommending approval
On a typical mid-market commercial project, this process regularly identifies between 10% and 30% in change order costs that should not be approved as submitted. On a $500,000 change order log, that's real money.
The Best Change Order Is the One That Never Gets Written
The most effective cost management happens before the change order arrives. That means reviewing drawings and specifications for conflicts before construction begins. It means processing RFIs and submittals quickly and accurately so field decisions don't create scope drift. It means maintaining a tight change management process from day one so the contractor knows the owner's representative is watching.
Contractors work differently when they know someone is paying attention. That's not a criticism — it's human nature. A project with an experienced owner's representative in place tends to have fewer change orders, and the ones that do come in tend to be priced more carefully.
If you're managing a commercial construction project in the Los Angeles area and you're not sure whether your change orders are legitimate and fairly priced, that's worth a conversation.
Have a change order you're not sure about? Let's talk.
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