Not All Construction Changes Are Created Equal
When the scope, cost, or time of a construction contract changes, the contract must be formally modified. AIA A201 provides two primary mechanisms for modifying the contract: the change order (CO) and the construction change directive (CCD). The key difference is agreement: a change order requires consent from both the owner and contractor; a CCD allows the owner to direct work to proceed without contractor agreement on price or time. Both are critical CA administration tools tested on the ARE CE exam.
Change Orders (AIA A201 Section 7.2)
A change order is a written order, signed by the owner, architect, and contractor, stating the agreed-upon changes to the contract sum and contract time resulting from a change in the work. All three signatures are required - the change order is a three-party agreement. Change orders are used when: the change scope is clear; the cost impact can be agreed upon before work begins; and both owner and contractor are willing to sign.
The change order process typically follows:
- Change identified (by owner, architect, or field condition).
- Architect prepares a Proposal Request (PR) to the contractor asking for a price proposal.
- Contractor submits a Contractor's Change Order Proposal (CPR) with estimated cost and time impact.
- Owner and architect review; if acceptable, a change order is issued for signature.
- Signed change order becomes part of the contract documents.
Construction Change Directives (AIA A201 Section 7.3)
A CCD is a written order issued by the owner and architect that directs the contractor to proceed with a change in the work before agreement on price or time adjustment. Only the owner and architect must sign a CCD - the contractor's signature is not required. CCDs are used when: work must proceed immediately and there is no time to negotiate a price; or the owner and contractor cannot agree on the cost of a change.
When a CCD is issued, the contractor must proceed with the work and document all costs. The contractor's compensation is determined by one of three methods: a mutually acceptable lump sum; cost plus a predetermined fee; or actual costs as defined in A201 (direct costs of labor, materials, overhead - not full burden). The contractor must provide daily cost records if directed. If the parties cannot ultimately agree on the CCD price, it becomes a formal dispute resolved through the IDM and then mediation/arbitration process.
Minor Changes: Architect's Supplemental Instructions (ASIs)
For minor changes that do not involve a change in the contract sum or contract time, the architect may issue an Architect's Supplemental Instruction (ASI) unilaterally (without owner or contractor signatures). ASIs are used for minor clarifications, minor substitutions of equivalent materials, or minor adjustments in design that do not affect cost or schedule.
Key Exam Points
- Change Order (CO): requires owner + architect + contractor signatures; used when all parties agree.
- Construction Change Directive (CCD): requires only owner + architect signatures; directs work without contractor agreement on price.
- CCD: contractor must proceed; cost determined after the fact; may become a dispute if no agreement.
- ASI: architect alone; minor changes only; no cost or time change.
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