Change orders are critically important in construction contracts.

Construction Contract Change Orders alter the original scope, cost, and timeline of a project — with direct legal, financial, and operational consequences.

• Scope Clarification & Control: They document and authorize any deviation from the original contract (e.g., design changes, site conditions), keeping all parties aligned and avoiding scope creep.
• Cost Impact: They adjust the contract price to reflect additional work or deductions, ensuring contractors are compensated fairly and clients know what they’re paying for.
• Schedule Adjustments: Changes often impact project timelines — change orders formally revise completion dates, helping avoid claims or penalties.

As real-world projects evolve, change orders protect both parties by keeping the contract accurate and enforceable.

Fraud can occur at multiple points within construction contract change orders due to their flexibility and frequent use. Key fraud risks include:

1. Inflated Costs: Contractors or subcontractors may exaggerate labor, materials, or time required in a change order to pad profits.
2. Fictitious Work: Submitting change orders for work that was never performed or wasn’t necessary to begin with.
3. Kickbacks & Collusion: Internal staff or project managers might approve unjustified change orders in exchange for under-the-table payments or favors from contractors.
4. False Emergencies: Labeling changes as "urgent" to bypass proper approval processes or competitive bidding.
5. Duplicate Billing: Charging for the same change order work under multiple headings or projects.
6. Backdating or Forging Approvals: Modifying documents to make it look like changes were approved in advance when they weren’t.

A general contractor can validate the veracity (truthfulness and accuracy) of change orders through the following key practices:

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✅ 1. Require Detailed Documentation

• Breakdowns of labor, materials, equipment, and time.
• Photos, site logs, and work progress reports.
• Reference to contract clauses justifying the change.

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✅ 2. Cross-Check Against Original Scope

• Compare the change order against the original contract and drawings.
• Confirm that the work is not already included in the base contract.

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✅ 3. Obtain Independent Estimates

• Use internal estimators or third-party consultants to verify that pricing is fair and market-aligned.

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✅ 4. On-Site Verification

• Inspect the jobsite to confirm the actual need, completion status, and whether the change work was performed as claimed.

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✅ 5. Audit Trail & Approval Workflow

• Ensure each change order has a clear paper trail and was approved by all required parties (GC, architect, owner).

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✅ 6. Use a Standardized Change Order Form

• Forces all parties to include consistent, complete information.
• Makes it easier to spot vague or inflated claims.

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✅ 7. Review Timing & Frequency

• Frequent or last-minute change orders can be red flags.
• Review whether they align with actual field conditions and not just poor planning.

Strong internal controls and professional skepticism are key to protecting against inflated or fraudulent change orders.

I have created a checklist that includes subcontractor specific workflow tips for verifying change orders.