Contract documents

June 27, 2023

In the world of construction projects, changes are inevitable. They can arise due to unforeseen circumstances, design modifications, or client requests. When changes occur, two common methods of addressing them are through Construction Change Directives (CCDs) and Change Orders. Although they may seem similar, CCDs and Change Orders have distinct characteristics and processes. This article aims to shed light on the differences between these two mechanisms and their implications for construction projects.

Construction Change Directives:

A Construction Change Directive is a directive issued by the owner or client to the contractor that authorizes a change in the project scope, schedule, or other contract terms. CCDs are typically employed when there is an urgent need for a change, but time does not allow for a formal Change Order process. They serve as temporary instructions, allowing work to proceed while the final cost and details of the change are determined.

Key features of CCDs include:

• Immediate implementation: CCDs are used when time is of the essence. The owner issues the directive, and the contractor is expected to proceed with the change immediately, without waiting for formal approval or negotiation.
• Provisional nature: CCDs are temporary instructions that enable work to continue while the details are finalized. They specify the change but do not determine the final cost or schedule impact.
• Cost and schedule determination: Once a CCD is issued, the contractor is obliged to implement the change. The subsequent negotiations between the owner and contractor establish the final cost and schedule adjustments associated with the change.

Change Orders:

Change Orders, on the other hand, are formal documents used to modify the terms of the construction contract. They are typically employed when there is a change in project scope, specifications, or other contract elements that require a thorough evaluation before implementation. Change Orders provide a structured process for reviewing, negotiating, and documenting changes to ensure clarity and protect the interests of all parties involved.

Key features of Change Orders include:

• Formal process: Change Orders follow a formal procedure involving documentation, review, negotiation, and agreement between the owner and contractor. The change must be properly assessed, and its impact on cost, schedule, and other contract terms must be determined before approval.
• Contractual modifications: Change Orders become legally binding modifications to the original contract. They establish the revised scope of work, adjustments in cost, schedule, and any other pertinent contractual elements affected by the change.
• Change evaluation: Change Orders facilitate a detailed examination of the proposed change, ensuring that its implications are thoroughly assessed, including the impact on project costs, schedule, quality, and other relevant aspects. This process promotes transparency and accountability.

In summary, while both CCDs and Change Orders address changes in construction projects, they differ in their timing, nature, and processes. CCDs are provisional instructions issued for immediate implementation, allowing work to proceed while final costs and details are determined. Change Orders, on the other hand, involve a formal process that includes evaluation, negotiation, and contractual modifications. They provide a structured approach to reviewing and documenting changes, ensuring clarity, and protecting the interests of all parties involved. Understanding these differences is crucial for effective change management in construction projects, enabling smoother execution while safeguarding the interests of both owners and contractors.

Looking for the AIA Change Order – G701? Get it here.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.