Change Order – Cost Plus Contract

A change order is a written order signed by a contracting officer, directing the contractor to make a change that the changes clause authorizes the contracting officer to order without the contractor's consent. A change order is a charge for work not included in a contract's scope of work. Change order procedures and requirements are governed by contract terms and contract law, as well as various laws, which vary by jurisdiction, for publicly funded projects.

A cost-plus contract is one in which the purchaser agrees to pay the cost of all labor and materials plus an amount for contractor overhead and profit (usually as a percentage of the labor and material cost). This type of contract is often used when the scope of the work is undermined or highly uncertain and the kinds of labor, material and equipment needed are also uncertain. It is important that the contractor maintain complete records of all time and materials spent by the contractor on the work.