What’s a third-party change order review?

A third-party change order review involves an independent assessment of project change orders submitted by contractors on a regular basis throughout the project life cycle. This review validates that documentation is complete, changes are adequately substantiated, and compliant with contractual requirements. A third-party or independent reviewer can help enhance the change order process, leading to improved project controls, enhanced transparency among relevant parties, and real-time assessment of budget increases and schedule extensions. Additional benefits may include: Risk mitigation. Early detection of and risk management strategies for potential errors, fraud, or mismanagement. Better project management. Allows project team members to focus on construction while having a third-party evaluate the scope and impact of changes, enabling more effective planning, scheduling, and coordination. Contract compliance. Verifies that change orders comply with contract terms and conditions, resulting in fewer disputes and easier financial closeout at project completion.

Article

Managing construction change orders: Reduce risks and improve controls

Oct. 3, 2025 · Authored by Charnee Foston, Henry Morris

Change orders on construction projects are inevitable, as unforeseen site conditions arise and design adjustments, scope modifications, and other client-driven changes occur. While these can lead to cost overruns, delays, coordination issues, compromised project quality, and litigation, they don’t have to.

Having formalized change order processes, procedures, and forms is critical to protecting all parties from financial, schedule, and legal risks. Implementing a structured environment with proactive plans and processes can help you mitigate risks associated with change orders and improve project controls.

Challenges

Change orders are often a source of stress for project owners and contractors alike. Miscommunication, scope ambiguity, unassigned responsibility, and lack of timely approvals are some of the most common issues with change orders. Specifically, projects can suffer from:

Unauthorized work, such as when contractors proceed with changes before formal approval, making it difficult to control costs or hold parties accountable.
Incomplete or vague change order requests, which create confusion about the scope and pricing, or do not fully itemize the estimated costs, leading to disputes.
Delays in reviewing and approving change orders can stall the project, impacting the critical path and overall timeline.
Disputes over cost allocation, such as disagreements on whether a change is owner-directed, a design omission or error, or contractor-caused, can escalate into costly claims or litigation.

These challenges can often be mitigated by having a clearly defined change order process, implementing internal controls that promote transparency and repeatable processes, and conducting change order assessments throughout the project life cycle.

The change order process

A formalized change order process ensures that modifications are adequately documented, reviewed, and approved before work proceeds. This transparency helps maintain clear communication among all parties, establishes accountability, and provides a verifiable audit trail that can be crucial in resolving disagreements.

Moreover, a disciplined change order procedure enables project owners to control budget overruns and schedule impacts by requiring detailed cost estimates and time extensions tied to each change. It also helps prevent scope creep by clearly defining what constitutes a change and helping to ensure that only authorized modifications are implemented. Ultimately, adhering to a formal change order process safeguards the project’s financial health and timeline, mitigates the risk of costly disputes, and promotes a collaborative environment where all stakeholders understand and agree upon the evolving project requirements.

Charnee Foston

Director