Unclassified change orders and the thirty day rule
Most owner change order logs have a column for cause. Most of those columns have a lot of blanks. The blank does not mean nobody knows. It means nobody was forced to write it down while they still knew.
A thirty day rule is a plain internal policy: every PCO or change order entry in the owner's register gets a cause within thirty days of the date it was logged, or it is flagged in the monthly report until it does. This post explains why thirty days, what the flag should look like, and what happens on projects that do not have the rule.
Why facts about cause decay so fast
In the week a conflict is found, everyone involved can tell you what happened. The superintendent remembers which sheet showed the beam. The project engineer remembers the RFI. The architect remembers whether the revision was theirs or the owner's. A month later the same people are dealing with the next twenty problems, and the story has already smoothed into something shorter and less useful.
By closeout, the only record left is the executed change order, and most change order forms describe the work, not the cause. An owner reading the register two years later sees a reroute, a price, and nothing else. Whatever the cause was, it is now effectively owner scope, because that is the only category with nobody left to argue for a different answer.
Why thirty days and not sixty or ten
Ten days is too short. A PCO often arrives before the RFI that explains it has been answered, and forcing a cause on day ten produces guesses that have to be corrected later. Sixty days is too long. Two pay applications will have passed, the change may already be executed and certified, and the people involved have moved on.
Thirty days lines up with a monthly rhythm. One pay application cycle. One owner report. A change that appeared in this month's report without a cause will be in next month's report with a flag if it still has none. That is enough to get a decision without creating a pile of premature labels.
What the rule looks like in practice
The rule needs three things: a date logged on every entry, a cause field that can be empty, and a monthly list of entries where the date is more than thirty days old and the field is still blank.
The provisional cause
Allow a provisional cause. An entry marked provisional owner scope is better than a blank, because it tells the reader somebody thought about it. Provisional entries should still be flagged, but at a lower level, and should be confirmed or changed before the change order is executed.
The flag, not the block
The rule should not stop a change order from being executed or a pay application from being certified. Holding up the contractor over an internal owner field creates a different problem. The flag belongs in the owner report, where the board or the owner's representative can see that a decision is overdue and ask for it.
The running total
Show the dollar total of unclassified entries, not just the count. A fictional $19 million fire station with four unclassified PCOs totalling $8,000 is a minor housekeeping item. The same four PCOs totalling $410,000 is an open question about who is paying for two percent of the project.
What happens without the rule
Consider a fictional $35 million middle school on CM at risk. Over the course of the job, the contractor submits 210 PCOs. The owner's representative is diligent but busy. About half the entries get a cause when they are logged. The other half are meant to be revisited.
At closeout, the owner's contingency is nearly spent and the board asks what it was spent on. The register says that roughly half the drawdown has no cause. It is too late to separate design gaps from owner requests, and any conversation with the architect's carrier starts with a record that cannot support it. Nothing in this story involves bad faith. It is what a blank column does when nobody is assigned to fill it.
An owner's ledger that tracks the date, the cause, and the age of each blank makes the rule mechanical. Costwitness raises the flag when an entry passes thirty days without a cause and keeps it in the monthly report until someone decides. The decision is still a human one. The reminder is not.
Where to start this month
- Add a logged date and a cause column to your change order register if either is missing, and back fill the date from the PCO cover sheets.
- List every entry older than thirty days with no cause, with its dollar value, and put that list in front of whoever can decide.
- Write the thirty day rule into your owner's representative scope or your internal project controls procedure so it survives staff changes.
Questions on this
Should the contractor be told about the thirty day rule?
Yes. It helps to ask the contractor to propose a cause on every PCO. The owner is not bound by the proposal, but it gives the owner's side something to confirm or dispute within the window rather than starting from nothing.
What if a cause is assigned and later turns out to be wrong?
Change it, and keep a record of the change. A register that logs who changed the cause and when is more credible than one that only shows the final answer. A corrected cause is normal. A cause that was never assigned is the problem.
Does the rule apply to small change orders?
It should apply to everything, because small changes add up and because the habit is easier to keep when there are no exceptions. If the volume is high, a provisional cause on small items is acceptable as long as the monthly total of provisional entries is reported too.
In the product
Change order register, Monthly owner report, Contingency ledger. Free tool: Change Order Exposure, Pre-GMP Readiness Score.
Keep reading
Earlier: Notice deadlines: the clock that nobody on the owner's side is watching. Later: Owner scope change or design gap: the same duct conflict, two different bills. All articles on change orders.
See the cause register on a project like yours.
Thirty minutes on a call. The change order register with causes, the audit trail, and the notice clock, on a fictional project.