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Construction glossary

What is a Change Order?

A Change Order in construction essentially refers to a modification to the original construction contract. These can occur due to unforeseen circumstances, changes requested by the client, or any errors or omissions found in the initial contract. They can include alterations in construction methods, designs, materials, and site conditions, impacting the scheduled tasks and the project's cost. Change orders are documented formally and require official approval before being executed. This mechanism ensures transparency amongst all parties involved, preventing disputes during the project life-cycle. It's important to manage them carefully to prevent project delays and budget overruns.

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Other construction terms

Unit Price Billing

What is Unit Price Billing?

Unit Price Billing is a method used in the construction industry where costs are determined based on agreed-upon rates for specific types of work. This method means you pay for materials and labor bas...
Leverage

What is Leverage?

Within the construction industry, "leverage" often alludes to the concept of using a relatively small initial investment, or resources such as machinery, time, or manpower, to gain a high return. This...
Job Costing

What is Job Costing?

Job Costing, in the context of the construction industry, is a specific accounting methodology used to track costs and profitability associated with individual projects. It hinges on a project-by-proj...

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