Change events and potential change orders
How a possible change is captured as a change event, priced as a potential change order, submitted and approved, and how exposure is tracked before anything is signed.
On this page
A signed change order is the end of a story. The change event is the beginning. This page explains how the app tracks a change from the moment it is found, so exposure is visible on the job long before a signature. For the signed side, see Commitments and change orders.
The lifecycle
Different contracts and tools use different names. The app keeps each stage as its own linked record (change event, potential change order, change order request, change order package), so the history of each stage is kept and nothing is retyped. How many of those stages you use is a project setting: one, two or three tiers. See Change events and change orders for the screens.
| Stage | Common names | What’s known |
|---|---|---|
| Event | Change event, issue, potential change | Something happened. Rough estimate at best |
| Priced | Potential change order (PCO) | Cost and revenue estimated, sub quotes attached |
| Submitted | Change order request (COR), proposal | Sent to the owner, waiting |
| Approved | Change order (CO), or construction change directive (CCD) | Contract changed. Billable |
| Billed | SOV line on a pay app | On the G703 |
A change can also be rejected or voided at any stage. Rejected changes stay on record, which matters if the cost was already incurred.
Where change events come from
A change event can come from any of these. In the app, an RFI can be set as the event’s Origin RFI; for the others, describe the source in the event’s reason and attach the record:
- A daily log or photo showing a hidden condition.
- An RFI answer that adds or changes scope.
- A submittal returned with changes.
- An owner direction, verbal or written.
- A drawing revision or bulletin.
- A sub’s notice of a change on their scope.
The person who finds it does not need to price it. A super can flag a condition; a PM decides whether it’s a change.
Following RFI-212
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Event opened from the daily log
The super logs missing fire dampers in the L3 corridor with photos. The PM opens a change event with a rough order of magnitude (ROM) by cost code.
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Linked to RFI-212
The question goes to the design team as RFI-212, set as the change event’s origin. The answer confirms added scope.
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Priced
The mechanical sub prices it through an RFQ sent from the change event. A PCO on the prime contract is created from the change event, and its grand total includes your markup: $86,400 on the revenue side. A second PCO from the same event, on the mechanical subcontract, carries the cost side by cost code.
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Submitted
The PCO is submitted for review, on its own or grouped into a change order package (through a change order request if the project uses three tiers), with the photos, RFI and quote attached.
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Approved as CO #14
The owner signs and the package is executed as CO #14. The approved owner change order updates the prime contract, the change on the subcontract updates the sub’s contract, and the change event posts its budget change when it is closed.
Cost side and revenue side
Every change record has two sides:
- Revenue: what you expect the owner to pay, through a prime contract change.
- Cost: what you expect to spend, by cost code, including the commitment changes to subs and suppliers. See Subcontracts and commitment changes.
The difference is the margin on the change. Keeping both sides on one change event means a change where cost is known but revenue is disputed shows up as what it is: exposure.
Exposure views (Planned)
Planned: every job shows its change exposure at a glance. Today, the Change Events and Change Orders lists filter by status, and the budget keeps pending and approved changes in separate columns.
| View | Shows |
|---|---|
| Open events | Unpriced changes, with rough estimates and age |
| Pending | Priced and submitted, waiting on the owner |
| Cost ahead of approval | Costs already posted against changes that aren’t approved |
| Approved, not billed | Signed changes not yet on a pay app |
Pending and potential changes can feed the forecast according to your company’s policy: signed only, or including expected changes. How unapproved changes are treated for revenue recognition is an accounting policy decision your team and CPA set. Applying your policy to the forecast automatically is Planned; the app won’t choose the policy for you.
Agents and change events
RFI and Risk agents that suggest change events and flag aging pending changes are Planned. When they ship, a person will approve every action. See How agents work.
Keep exploring
Related across os.construction
- BlogChange events vs change orders: tracking exposure before it's signedBy the time a change order is signed, the money is already spent or already lost. The change event is where exposure starts. Here's how to track it, what to put in the forecast, and why the gap between the two is where margin leaks.
- GlossaryChange Order (CO)A signed agreement between owner and contractor that changes the contract scope, price, time, or a combination of them.
- ExplainerLife of a change orderFollow one change order from a hidden condition through change event, PCO, COR and owner approval, then watch the money move into budget, pay app and WIP.
- ExplainerFrom field question to paid change orderFollow RFI-212 into a change event, a priced PCO, executed CO #14, the budget and a pay app in os.construction, with every link stored on one record.
- DocsChange events and change ordersTrack a change from the first sign of it to an executed change order. Change events, potential change orders, packages, commitment change orders and budget posting in the app.
- BlogThe real cost of re-keying a change orderWe followed one change order from a ceiling cavity to the pay app and counted every time someone retyped the same facts. The typing is the cheap part.
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