What are 'change orders' in contract administration?

Change orders in contract administration are formal requests to modify the original contract terms. They are essential when changes are needed in the scope of work, specifications, or any other aspect of the contract that impacts its execution. This process ensures that both parties agree to the modifications and that any necessary adjustments to compensation, timelines, or deliverables are documented and sanctioned.

By establishing a formal process for requesting changes, change orders help maintain clarity and accountability throughout the contract lifecycle. This also protects the interests of both the contracting parties, ensuring that any alterations are mutually agreed upon and properly recorded. In contrast, proposals for additional compensation, adjustments to performance metrics, and revisions to standard operating procedures do not inherently require the same level of formal documentation nor do they necessarily signify a modification of the contract itself. Thus, they do not capture the essence of what a change order entails in the context of contract administration.