A potential change order (PCO), also called a change order request (COR) or proposed change order, is the contractor’s priced proposal for a change. It usually includes the scope description, labor, material, equipment and subcontractor costs, markups, and any requested time extension. The owner reviews it, negotiates, and either approves it into a change order, rejects it, or directs the work with a construction change directive.
Why it matters
The PCO is where entitlement and price get argued. A clear PCO with backup gets approved faster, which means faster billing. Pending PCOs are also a key forecasting number: work already performed on unapproved PCOs is a real cost with uncertain revenue.
Worked example
Illustrative: for the fire dampers found through RFI-212, the GC on Riverside Medical Center submits a PCO: mechanical sub quote $68,000, GC supervision $6,500, fire-stopping $3,600, subtotal $78,100, plus $8,300 of markup per the contract (about 10.6%), total $86,400. The owner approves it as CO #14.
Common mistakes
- Submitting PCOs without backup (quotes, T&M tickets, a time impact analysis).
- Bundling unrelated items so one disputed item holds up the rest.
- Not forecasting the cost of pending PCOs that the field is already building.
How os.construction handles it
We’re building PCOs that pull cost from the linked change event and sub quotes, and keep their status visible in the forecast until the owner signs.