Construction projects are complicated, often involve multiple players, and rarely go exactly as planned. As you get into a project, the owner changes their mind about something, unexpected problems are discovered, or one subcontractor makes a change which causes a problem for everyone else. While there is always flexibility in the quoted price and in the schedule, it’s also important to retain as much control over the details as possible so that projects can be delivered on time and within budget. To this end it’s important to understand the role of construction change directives in your project and in your contract.
A good construction contract allows for both small and large changes in the scope of work and outlines a process by which these changes and any associated changes in timeline and price are documented.
Claims & Change Orders
If you’re told about a change and make the change before filing a change order, then later, you file a claim for the work completed. While construction businesses have less leverage in enforcing claims, they occasionally occur due to the complex and timely nature of projects.
Change orders are more common. They’re a simple written agreement that incorporates itself into the main contract that states the adjustments in scope, price, and time. These are signed by all parties and become part of the main construction agreement.
Change Directives
A change directive or force account work is not the same thing as a change order. A change order requires agreement from the owner and other parties involved. A change directive is used to direct the contractor to perform additional work when there is not an agreement between the owner and contractor. Change directives are not a request, but are instead directions that the construction contractor will have to figure out how to handle within the budget or justify additional costs.
The construction contract should state how change directives will occur. Often, when the owner and contractor cannot agree on the work, the decision is made by the architect, who makes a final determination on changes to scope, schedule, and costs. Contractors are then free to include price adjustments on pay requests, but this can lead to lawsuits of the owner believes the contractor is inflating the price.
While change directives are less frequent than change orders, they often are the first sign of problems between the contractor and owner and are frequently litigated. Construction change directives have many of the same enforcement requirements that come with contracts with the additional complication that the contractor does not have to agree to the specific change directive.
Is your company operating many projects in multiple states? Do you want to ensure you fully understand not just change directives, but other key legal challenges, and be prepared for payout problems before they occur? Request a free lien seminar from one of our legal experts. We are offering an in-depth seminar for your management team. Click below for more information and fill out the form to see if your company qualifies for an NLB lien seminar.
This blog is for educational purposes only and not intended for legal advice.
Frequently Asked Questions
What is a Construction Change Directive?
A Construction Change Directive (CCD) is a written order from the property owner or the project architect directing the contractor to perform a change in the work BEFORE the parties have agreed on the cost or schedule impact. CCDs are typically used when the project cannot wait for change order negotiations to complete — the work must proceed to avoid delaying the entire project. The CCD forces the contractor to perform the work; the contractor preserves the right to recover the actual cost plus reasonable profit through later negotiation or litigation.
What is the difference between a change order and a change directive?
CHANGE ORDER: a bilateral written agreement signed by both parties documenting an agreed change to the contract scope, cost, and schedule. The contractor agrees to the work AND the price BEFORE performance. CHANGE DIRECTIVE: a unilateral written order from the owner or architect requiring the contractor to perform work BEFORE the price is agreed. The contractor must perform; the price is determined later through negotiation or dispute resolution. Change orders are preferred when there's time to negotiate; change directives are used when work must proceed immediately.
How do I get paid for work performed under a change directive?
Under AIA A201 § 7.3.7, CCD work is initially compensated at the contractor's actual cost of performance plus an allowance for overhead and profit (typically 10-15%). The contractor documents actual costs through invoices, time records, and material receipts. The owner or architect reviews the cost documentation and determines a fair amount. If the parties disagree, the dispute is resolved through the contract's dispute resolution process (mediation, arbitration, or litigation). The contractor's mechanics lien rights and prompt payment statute rights remain available for unpaid CCD amounts.
Can I refuse to perform work under a Construction Change Directive?
Generally no — under most standard contracts (AIA A201, ConsensusDocs, EJCDC), the contractor MUST perform CCD work and dispute the cost later. Refusing to perform CCD work can be a contract breach exposing the contractor to liability for delay damages or replacement-contractor costs. The contractor's protection is the right to recover actual cost plus reasonable profit — NOT the right to refuse the work. Exception: CCDs that exceed the contractor's reasonable performance capability (specialty work the contractor cannot self-perform) may be refused or subcontracted.
Can mechanics liens cover work performed under a change directive?
Yes — mechanics liens cover all unpaid work, including work performed under CCDs. The lien amount equals the value of labor and materials provided, which on CCD work means actual cost plus reasonable profit (the contractor's claimed CCD amount). If the owner disputes the CCD amount, the dispute becomes a litigation issue at the lien foreclosure stage — but the lien preserves the security interest while the dispute is resolved. National Lien & Bond pursues mechanics lien recovery for CCD work as part of complete construction-payment recovery.
Do prompt payment statutes apply to Construction Change Directive work?
Yes — prompt payment statutes typically apply to ALL work performed under the contract, including CCD work, once the work has been performed and properly invoiced. The owner cannot withhold CCD payment indefinitely while pricing is disputed — at some point, the prompt payment clock starts and statutory penalties accrue. Some states require partial payment of CCD work at the contractor's claimed amount, with the disputed portion withheld in escrow pending resolution. Verify state-specific rules with construction-payment counsel.
How does National Lien & Bond help with Construction Change Directive disputes?
National Lien & Bond pursues unpaid CCD work as part of a complete construction-payment recovery strategy. For Illinois-based engagements, Hal Emalfarb's firm at Emalfarb Swan and Bain handles strategic coordination. For 50-state coverage, NLB's network attorneys handle CCD documentation, mechanics lien filing for unpaid CCD amounts, prompt payment statute enforcement, and direct contract claims as integrated remedies. The combination of lien leverage + prompt payment penalties + contract enforcement frequently produces CCD payment at settlement. Contact NLB for a free initial consultation.