What Is a Change Order in Construction? PCO, COR, CO, and CCD Explained
A change order is a signed amendment to the construction contract. But the terms around it — PCO, COR, CCD, ASI — describe different stages and tools. Here's how they actually fit together, and where contractors lose money on them.
A change order is a written, signed amendment to the construction contract that modifies the scope, the contract sum, the contract time, or all three. It is the official record that the owner and contractor agree the original plans no longer match what's being built, and that the contract is being adjusted accordingly. Once it's signed, it's part of the contract.
The confusion isn't usually about the change order itself — it's about the cloud of acronyms around it. PCO, COR, CO, CCD, ASI all show up in the same conversation, and they are not synonyms. They describe different stages of one process and a couple of different tools. Getting them straight is the difference between getting paid for extra work and eating the cost.
The change order chain
Most changes move through a predictable sequence:
- Something changes. A field condition turns up, the owner wants something different, or a design conflict surfaces. This is the trigger.
- PCO — Potential Change Order. The early, formal notice that a change may affect cost or schedule. A PCO flags the issue and starts the clock before any labor or materials are burned. It's a heads-up, not a bill.
- COR — Change Order Request. The contractor's formal, priced proposal: here's the scope, here's the cost, here's the schedule impact. This is where the actual numbers get attached. Multiple CORs are often bundled together.
- CO — Change Order. Once the parties review, negotiate, and sign, the request becomes a change order — the binding amendment to the contract. Only now is the change contractually real, and only now should the extra work be billed.
The critical rule running through all of it: don't start out-of-scope work without a signed change order (or a written directive — see below). Performing the work first and papering it later is the single most common way contractors end up in a payment dispute.
The two tools that aren't change orders
A couple of related documents get lumped in but work differently:
CCD — Construction Change Directive. This is the "do it now, price it later" tool. When work has to proceed immediately — a burst pipe, a safety issue, a change the owner is adamant about — and there's no time for the full change-order negotiation, the owner and architect can issue a CCD directing the contractor to proceed. Crucially, a CCD is unilateral: it requires the owner and architect, but not the contractor's agreement on price. The contractor performs the work and tracks every hour, material, and piece of equipment; the cost and time get settled afterward and the CCD is typically converted into a change order once priced. Under the AIA system, the relevant authority is A201 §7.3.1, and CCDs are often issued on form G714.
ASI — Architect's Supplemental Instruction. A clarification or minor change issued by the architect that does not affect the contract sum or contract time. It only needs the architect's signature. The trap: if a change touches cost or schedule at all, an ASI is the wrong tool — it should be a change order or a CCD. Work issued as an ASI but actually carrying cost is a classic source of unpaid work.
How they fit together
| Term | What it is | Who signs | Is it binding? |
|---|---|---|---|
| PCO | Early notice a change may have impact | Contractor initiates | No — notice only |
| COR | Contractor's priced proposal | Contractor submits | No — proposal |
| CO | Signed contract amendment | Owner + architect + contractor | Yes |
| CCD | "Proceed now, price later" directive | Owner + architect | Directive is binding; price settled later |
| ASI | Minor clarification, no cost/time impact | Architect only | Yes, but only for no-impact changes |
The AIA's standard change order form is G701. There are no official AIA forms for PCO/COR/CE — that terminology varies by company and by software — but the change order and the CCD are formalized in the contract documents.
Where contractors lose money
The mechanics are only half the story. The money leaks in predictable places:
- Starting work on a verbal okay. "Just get it done, we'll sort the paperwork out" is not a signed change order. If the relationship sours, that work is unpaid. Insist on a signed CO or a written CCD before proceeding.
- Under-pricing the change. The direct cost of the new work is the obvious part. The hidden costs — supervision, remobilization, schedule disruption, rescheduling other crews — are what get left off. Industry markup for overhead and profit on change-order work commonly runs in the 15–25% range; leaving it off is leaving money on the table.
- Forgetting the schedule impact. A change order that adjusts the cost but not the contract time can leave the contractor on the hook for the original deadline — and exposed to liquidated damages for finishing "late" on work that was expanded by the change. Every change should be reviewed for added days, and any added days should be written into the signed CO.
- Missing the notice deadline. Most contracts require written notice of a change within a set window (often 7–14 days). Miss it and the claim can be invalidated regardless of merit. This is exactly what the PCO stage is for.
- Losing the trail. When a CCD's price is negotiated months later, the contractor's recovery depends entirely on the documentation captured while doing the work — daily logs, photos, marked-up drawings, time records. No trail, no leverage.
The bottom line
A change order is the signed amendment; the PCO and COR are the stages that lead to it; the CCD is the emergency "proceed now" tool that becomes a change order once priced; and the ASI is for minor no-cost clarifications only. Keep the stages distinct, never start out-of-scope work without a signature or a written directive, price the full impact including schedule, and keep the documentation trail intact. Treat the process loosely and change orders become the line item where margin quietly disappears.
TuttoHQ tracks the full change lifecycle — from potential change order through priced proposal to signed change order — with the cost and schedule impact and supporting documentation attached at each stage, so nothing gets started on a handshake and nothing gets billed without a record. Start a free trial to manage changes without leaking margin.