As with the Prime Contract Change Order, Subcontract Change Orders are the only documents that can
change the scope of work, contract amount and contract time of a subcontractor. The subcontractor
Change order should only be issued when a fully executed Prime Contract Change Order
The Subcontract Change Order must have the same description of the changed work as the Prime
Contract Change Order. This is done to insure that the subcontractor is tied to the Prime Contract
Change Order as is the Prime Contractor. If the descriptions are different the Prime contractor may be
responsible for any discrepancies. As you remember, the description on the Prime Contract Change
Order should match the description on the PCO. The description on the PCO comes from the
descriptions submitted with the costs form the subcontractor. If the original descriptions are accurate and
correct it should now come full circle back to the subcontractor from which the original costs were
submitted.
If the Prime Contract Change Order includes several items for one subcontractor, the single Subcontract
Change Order must also include several individual changes. Information from more than one Prime
Contract Change Order should not be listed on one Subcontract Change Order. The following is the
procedure for processing a Subcontract Change Order.
For the correlation of Subcontract change orders to budget adjustments for each subcontract, see the
Budget Adjustment Chapter
Fill out the SCO form for each subcontractor using full description of the work from the Prime
Contract Change order and the Change Order Request and the original subcontractor quote. The
description on the change order becomes a part of the contract. The description should include the initial
change document such as the RFI number or RFP number.
Verify the total of the Subcontractors items on the Job Budget Adjustment sheet matches the amount
of the Subcontract Change Order. Confirm that the total amount of the subcontractor items on the JBA
matches the total amount of the Subcontract Change Order. This will assure that an item has not been
included in a SCO that is not included in the IBA or the PCCO.
Mail the completed change order to the subcontractor for signature. The subcontractor's signature is
the agreement to do the work. By signing the change order there is no question that there has been a
"meeting of the minds" and the agreement finalized. .
Send a signature request letter or note with the change order and include a “return by” date. By
placing a note on the change order, it will remind them to process the change order and mail it back
immediately.
Keep two copies, one for the subcontractor file (temporarily filed on the contract side) and one as a
suspense document. Prior to sending the original change order to the subcontractor make 2 copies of
the Subcontract Change Orders. File one copy on top of the contract in the subcontractor's file. This will
allow you to know two things immediately. 1) There are subcontractor change orders that still need
signature and 2) the current potential contract amount for that subcontractor. Both are crucial when
progress payment billings are being reviewed. The second copy is put in a holding file for change orders
needing signatures. This gives a visual status of which change orders need signatures and can be
easily faxed to contractors marked with second and third notice comments.
Call subcontractors who have not returned change orders. The reminder will help to expedite the
change order process. Remind them that they cannot bill for the change order unit it has been signed
and processed.
Sign the change orders as they are returned (Superintendent or Manager). This is the final check prior
to the change order becoming final.
Run copies of the signed change orders. (Distribute as noted in the distribution Section.)
Distribution of Subcontract Change Orders
Once all of the Subcontract Change Orders have been completed and are ready for signature by the
subcontractors and the Prime COntractor:
• Make 1 copy of the Prime Contract Change Order
• Make 1 copy of the Budget Adjustment Sheet
• Make 3 copies of the subcontract change order. 1 copy for suspense file, 1 copy for the main office
and 1 copy for the subcontractor file (temporary). The original is mailed to the subcontractor
• Distribute the copies:
• Send the Copies of the unsigned SCO’s, Original Prime Contract Change Order and Job Budget
Adjustment Sheet to the Prime’s Main Office. The Prime Contract Change Order should be on the bottom
then the unsigned Subcontract Change Orders, with the Budget Adjustment Sheet next, then the IBA
checklist on top.
• Mail the original subcontract change order to the subcontractor.
• File copy of the SCO on top of the subcontractor’s contract.
• File a copy of the SCO in the tickler file.
• Create a Prime Contract Change Order File. File the copy of the Prime Contract Change Order on
top followed by Job Budget Adjustment on the bottom. A copy of the SCO’s can be filed in the PCCO if
desired
As the SCO’s are signed and returned:
• The Project Manager must sign the change orders
• Make 3 copies
• File 1 copy on top of the contract side of the subcontractor folder. Throw away the unsigned copy.
• File 1 copy in the Prime Contract Change Order File
• Mail 1 copy to the Subcontractor
• Send the original to the Main Office
The same procedure is followed for Backcharge and Unbudgeted Change Orders. Substitute the Prime
Contract Change Order for the back up information that started the backcharge or unbudgeted work.
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