Subcontractor change orders: how to get paid for extra work

To get paid for extra work, a subcontractor needs a written record of the change, a price the other side has accepted, and notice given on time. Most disputes over change orders come down to one missing piece: the work was done on a phone call, and nothing was written down until the bill was late.

This guide explains the common steps, the difference between a change order and a directive, and the notice clocks you may face. It uses two public sources as examples: the federal Changes clause and the American Institute of Architects (AIA) explanations of its change forms. Your own subcontract is what controls on your job.

What is a change order?

A change order is a signed document that changes the contract. On AIA-based contracts, AIA describes the G701 Change Order as signed by the owner, architect and contractor, and as adjusting the contract sum, the contract time, or both. It is used once the parties agree on the change, including its cost and time effect.

On a subcontract, the same idea applies one level down. The general contractor (GC) usually issues a subcontract change order, and you sign it. It should state the scope, the price and any change in time.

What is a change directive, and how is it different?

Sometimes the work cannot wait for a price. AIA’s G714 Construction Change Directive is meant for changes that, if not expeditiously implemented, might delay the project. AIA says the contractor must promptly proceed with the change described in it.

	Change order	Construction change directive
Price agreed first?	Yes	No, set later
Who signs?	Owner, architect, contractor	Owner and architect to start
Do you proceed?	After it is agreed	Generally yes, right away

Source for the table: AIA’s comparison. AIA also notes that once cost and time are agreed, the parties usually sign a change order to fold the directive into the contract.

The lesson for a sub: if you receive a directive, keep records of your actual costs from the first hour. The amount may later be set from your documented costs.

What steps should you follow when extra work shows up?

1. 1Spot the change
2. 2Give written notice
3. 3Price it
4. 4Get the signed change
5. 5Bill it

Illustrative sequence; follow the steps and deadlines in your own subcontract.

1. Spot the change. Compare the request with your scope and the drawings. If the request is new work, say so.
2. Give written notice. Email the GC the date, who asked, what was asked, and that you consider it extra work. A talk on site is not enough.
3. Price it. Break out labor hours, material, equipment, markup and any time impact. Keep the math simple enough for the GC to check.
4. Get the signed change. Ask for a signed change order or a written directive before you build, when you can.
5. Bill it. Add it to your next pay application as its own line, so it does not get lost in the original contract amount. See our guide to the G702 and G703 mistakes that delay payment and how to build a schedule of values.

What notice deadlines apply?

Deadlines vary a lot by contract, so read yours first. The federal Changes clause is a clear example of how short they can be. Under FAR 52.243-4, Changes (June 2007):

• If an order from the contracting officer other than a written change order causes a change, the contractor must give written notice of the date, circumstances and source of the order, and say that it regards the order as a change order.
• Costs incurred more than 20 days before that written notice generally cannot be included in the adjustment.
• The contractor must assert its right to an adjustment within 30 days of receiving a written change order or giving that notice, unless the government extends the period.
• An adjustment asserted after final payment is not allowed.

Costs before notice not allowed20 days

Assert adjustment within30 days

FAR 52.243-4 (June 2007). The 30-day period may be varied by agency procedures.

Source acquisition.gov

That clause binds the prime contractor and the government. Your subcontract may pass the same kind of clock down to you, sometimes with a shorter deadline. Check the notice clause for the number of days, who must receive notice, and whether it must be in writing.

What if the GC says “just do it, we’ll fix the paperwork later”?

This is the common trap. A verbal go-ahead can be hard to prove, and some subcontracts say extra work is not paid unless it is agreed in writing first. Here is a lower-risk reply:

• Confirm the request by email the same day: “Per your call today, we will do X. We will send a price by Friday.”
• Ask for a written directive if the work cannot wait.
• Track the time and material daily, with photos and signed daily sheets if the GC will sign them.
• Keep working only as far as the contract requires. A lawyer can tell you whether stopping is safe on your job.

How do change orders affect your other paperwork?

Change orders touch more than one form:

• Pay applications. Approved changes change the contract sum you bill against. Unpriced, unsigned changes are usually treated as a claim, though directed work may be billable while the price is pending, depending on your contract.
• Retainage. The extra amount may also be subject to retainage. See construction retainage rules.
• Lien waivers. A waiver can release rights to money for work through a date, so check that pending change orders are not released by mistake. See conditional vs unconditional lien waivers.
• Certified payroll. Extra hours on a prevailing wage job still go on the weekly report. See what certified payroll is.

Where Payrung fits

Payrung is being built to keep your schedule of values, approved changes, retainage and lien waivers in one place, so each pay application reflects the signed paperwork. It is not built yet. Join the waitlist.

This article is general information, not legal advice. Notice and payment rights depend on your contract, your state and the facts, so check with a qualified construction attorney.