How to Handle a Construction Change Order in Florida

Change orders are where construction projects go over budget. Not because every change order is dishonest -- some are completely legitimate -- but because most owners do not know how to read them, do not know what questions to ask, and sign them quickly to keep work moving. A GC who knows this has no incentive to scope tightly.

In Florida, there is no standard change order form required by statute for private commercial construction. The terms of your contract govern everything. That means the quality of your original contract and the scope document attached to it determine how many change orders you will see and what you will pay for them.

This guide covers the four causes of change orders, how to check pricing, what a legitimate change order looks like, and how to push back on one that is not.

Step 1: Understand the 4 Causes of Change Orders

Not all change orders are created equal. Before evaluating the price, identify which category the change order falls into.

1. Owner scope addition: You asked for something that was not in the original contract. A new door, upgraded finishes, an additional electrical circuit. This is a legitimate change order and you should pay for it. The question is how much.

2. Design error or omission: The drawings or specifications were incomplete or contradictory and the GC had to do work that should have been included in the original scope. Under most contracts, this is a gray area. If the GC could have identified the issue during the bid review, arguing that it is a design error change order is harder. If the issue is genuinely hidden in the design documents, who pays depends on the contract and, in some cases, whether the owner owns the design error or the GC does.

3. Unforeseen condition: Something encountered during construction that could not have been anticipated from a reasonable pre-construction investigation -- rock below a specified depth, undisclosed buried utilities, deteriorated structural elements behind walls in a renovation. Most contracts define what qualifies as a genuine unforeseen condition. This is a legitimate basis for a change order when the definition is met.

4. Predatory billing: Work that was within the original scope, repackaged as a change order because the GC underpriced their bid or because the scope document was vague enough to create ambiguity. This is the category that costs owners money unnecessarily.

Pro tip: Before evaluating any change order's price, ask yourself: "Should this be in the original scope?" If you are unsure, pull out the original contract documents and read the scope section. If the scope is a one-page narrative, you are vulnerable to category four. If it is a detailed specification with drawings, you have a basis for comparison.

Step 2: Never Authorize Work Without a Signed Written Change Order

In Florida, oral modifications to a written construction contract are enforceable in some circumstances -- but proving the terms of an oral change order in a dispute is expensive and uncertain. More importantly, allowing work to proceed without a signed change order removes your leverage on price.

The sequence should always be:

1. GC identifies a scope change and provides written notice
2. GC submits a written change order proposal with itemized pricing
3. Owner reviews, negotiates if necessary, and signs the approved change order
4. Work proceeds

If a GC says "we need to keep moving, we'll get you the paperwork later," the correct answer is to ask for the scope and price in writing before authorizing work. A written email from the GC describing the scope and price, with your written email approval, creates a documented record even if a formal change order form comes later.

Warning: Florida courts have found that allowing work to proceed without objection can constitute implied authorization. If work happens and you accept it without disputing it in writing, you may owe the GC the reasonable value of that work regardless of whether you signed a change order.

Step 3: Check the Markup Structure

A legitimate change order includes four components:

• Direct labor: Actual hours at a defined rate, or a subcontractor cost
• Materials: Actual cost of materials at supplier pricing
• Overhead: The GC's cost to manage and supervise the work, typically 10% to 15% on direct costs
• Profit (fee): The GC's margin, typically 5% to 10%

A combined overhead-and-profit markup of 15% to 20% on direct cost is standard in Florida commercial construction. Markups above 20% on large change orders warrant scrutiny and a request for cost backup.

Watch for double-markup: some GCs mark up subcontractor invoices that already include the subcontractor's overhead and profit, then apply the GC's overhead and profit on top. Whether this is permitted depends on your contract. Many contracts limit the GC to a defined markup percentage on subcontractor costs -- check your contract language.

Pro tip: Your original contract may include a negotiated change order markup rate. If so, apply that rate to every change order. GCs sometimes "forget" the negotiated rate and submit higher markups on individual change orders, knowing most owners will not cross-reference the contract.

Step 4: Compare Change Order Unit Prices to Your Original Contract Rates

If your original contract includes a unit price schedule -- cost per square foot of drywall, cost per linear foot of framing, cost per door installed -- compare the change order pricing to those rates.

A GC who bids framing at $4.50 per square foot in the base contract and then prices a framing change order at $7.00 per square foot is applying a different rate without justification. Ask for the discrepancy to be explained in writing.

On lump-sum contracts without unit prices, you have less direct comparison available. In this case, ask the GC to break down the change order into its component parts: labor hours by trade, material quantities, and unit costs for each. If the GC refuses to provide this breakdown, that is itself a red flag.

For change orders over $10,000, request competitive pricing from at least one other subcontractor if time allows. On legitimate change orders, a GC who is pricing fairly will not object to this.

Warning: "Time and materials not to exceed" (T&M NTE) change orders are common when the scope of a change is uncertain. They are legitimate when the change genuinely cannot be scoped in advance. But T&M changes require careful tracking -- ask for daily labor tickets signed by your representative on site, and reconcile them against the final invoice.

Step 5: Know What Is NOT a Change Order in a Well-Scoped Fixed-Price Contract

A well-written fixed-price contract with a detailed scope document should eliminate the majority of change orders that stem from category four (predatory billing). Specifically, the following items should never appear as change orders under a properly scoped fixed-price contract:

• Work required by the Florida Building Code (FBC) that should have been anticipated during design and bid
• Standard inspections and re-inspections within the original scope of work
• Temporary utilities (power, water, sanitation) during construction
• Site cleanup and debris removal
• Safety requirements required by Occupational Safety and Health Administration (OSHA) standards
• Contractor errors, rework, or deficient work that must be corrected to meet the contract requirements

If you receive a change order for any of these items, respond in writing that the item is within the original contract scope and that you do not authorize additional cost.

JK Prestige Construction writes fixed-price contracts with a scope defined tightly enough that only genuine scope additions -- things the owner actually decided to add or change -- trigger change orders. That is the difference between a fixed price that is fixed and a fixed price that is a starting point.

Step 6: Dispute Predatory Change Orders in Writing

When a change order is not legitimate, do not simply refuse to sign it and move on verbally. Dispute it in writing with a specific basis.

A proper written dispute:

1. Identifies the change order by number and description
2. States the specific reason you are disputing it (e.g., "This scope is included in the base contract under Section 3.2 of the specifications")
3. References the specific contract provision or specification section that supports your position
4. States whether you are authorizing any portion of the change order, and at what price
5. Requests a written response from the GC within a defined time period

Keep a change order log. Track every proposed change order, its status (approved, pending, disputed), and the date of each action. In a dispute, this log is your primary evidence.

Pro tip: In Florida, if your construction contract contains a "no damages for delay" clause and a "changes" clause, understanding how those provisions interact is important before disputing any time-related change order. Consult a construction attorney if the change order amount is significant and the contract language is complex.

For renovation projects and commercial construction in Jacksonville, the best protection against predatory change orders is a complete scope document, a detailed specification, and a GC whose reputation is built on not needing them.

Get a written estimate in 48 hours -- call (904) 944-0278 or request a consultation.