Construction Change Order request-Owner’s Perspective (budget overruns)

What we have observed in past projects is that on many capital projects, Change Order Requests (CORs) are where owners either "protect project value" or "quietly lose it".

For owners, Change Order Requests (CORs) are fundamentally a cost control exercise and one of the biggest drivers of budget overruns when not reviewed rigorously.

The challenge is not the existence of change, but ensuring that every request is evaluated through a structured lens of entitlement, schedule impact, and cost reasonableness.

There are common issues owners encounter during COR reviews:

1- Conservative, hidden or "Allowance-style” pricing disguised as firm costs.

2- Cost proposals lacking traceability to bid benchmarks or market norms.

3- Inadequate or narrative-only time impact analyses without CPM substantiation.

4- Claimed critical path impacts that are not demonstrated through logic or float consumption.

5- Limited transparency into labor productivity assumptions, equipment usage and crew composition.

Adding time sensitivity and approval pushes to all above add pressure on client's team.

For owners, each change order represents more than an added cost, it is a potential shift in project risk, contingency exposure, completion certainty".

A robust owner-side review framework should include at least the following basics:

1- Independent schedule review and validation of time impacts

2- Detailed cost reasonableness analysis against estimate or historical data

3- Strict alignment with contract provisions and notice requirements

4- Separation of entitlement, quantification, and negotiation phases

5- Clear documentation trail to support governance and audit needs

Strong change governance enables owners to maintain budget integrity, preserve schedule confidence, and minimize downstream disputes.

Ultimately, disciplined COR reviews are not about rejecting change orders they are about ensuring fairness, transparency, and informed decision-making across the project lifecycle.

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