Change Order Governance and Budget Protection Playbook

A beginner-safe system to stop 'scope creep spending' and enforce: no approved change order = no payment.

Run the OperationPlaybook45 min

Primary outcomes:

  • •Cost reduction: fewer unauthorized extras, fewer surprise invoices, tighter budget control
  • •Risk mitigation: clearer approvals, cleaner audit trail, reduced disputes

Core rules (keep it simple)

  1. 1
    No CO = no bill (except defined emergency rule)
  2. 2
    CO must include scope, reason, cost breakdown, and schedule impact
  3. 3
    CO approvals must follow a clear matrix
  4. 4
    All COs are tracked in one tracker and reconciled at close-out

Templates

Change Order Request Form

Standard form for requesting change orders

Change Order Request Form

Vendor:
Contract/SOW link:
Site:
Requested by:
Date:

Why is a change order needed?
- Reason:
[ ] Unforeseen condition
[ ] Scope gap / ambiguity
[ ] Customer requested change
[ ] Code/safety requirement
[ ] Other: ______

Scope change (plain English):
- Added work:
- Removed work:

Cost breakdown:
- Labor:
- Materials:
- Subcontractors:
- Markup:
- Total:

Schedule impact:
- Additional days:
- Critical path impact? (Y/N)

Evidence / support:
- Photos / notes / ticket link:

Approvals required (per matrix):
Approver name(s):
Decision:
[ ] Approved
[ ] Rejected
[ ] Needs revision

Close-out Reconciliation Checklist

Ensure all COs are properly closed

CO Close-out Checklist

Vendor:
Project/site:
Period:

- All COs are logged and have an approval status
- Invoices reference CO IDs where applicable
- No CO charges paid without approved CO
- Credits/reversals captured
- Lessons learned documented (scope gaps to fix in next SOW)

CO Tracker

Track all change orders in one place

CO IDVendorSiteDateReasonRequested $Approved $StatusApprover
(add rows as needed)

Approval Matrix (starter)

Define who can approve by amount

CO amountRequired approverBackupNotes
<$5k(define)(define)
$5k–$25k(define)(define)
$25k–$100k(define)(define)
$100k+(define)(define)

Definition of Done

  • every CO is requested, approved, and tracked
  • invoices cannot slip in 'extra' charges without CO linkage
  • close-out reconciliation catches and prevents leakage

Change log

v1.0 (2026-01): Latest release