Change Orders & Scope

What to do when the job turns out to be bigger than the estimate — and what it costs when you handle it wrong.

The Problem

The tech discovers a corroded coil behind a wall, ductwork that needs replacing, or an asbestos situation. The job is now bigger and more expensive than what the customer agreed to. What happens next determines whether this becomes revenue or a dispute.

Undocumented change orders are the #1 source of invoice disputes — average contested amount is $1,200–$4,000 per incident. At 5 disputes per month, that's $72K–$240K/year in contested revenue (ContractorPlus).

When a Change Order Is Needed

• Corroded components behind walls or in concealed spaces
• Ductwork that needs replacing (discovered during repair or install)
• Asbestos discovery (20–50% cost increase, 1–3 week delay)
• Equipment upgrade requested by customer
• Code compliance issue found during work
• Material unavailability requiring substitution

The 7-Step Field Process

1. Stop work — except for safety or code compliance, pause until the change is documented and approved
2. Document conditions — photos and video of what was found
3. Price the additional work — use the flat-rate price book, same as original. Price same day if possible — the longer the quote takes, the lower the approval rate.
4. Present to customer — explain what was found, why it matters, what it costs
5. Get written approval — signature on change order form (digital via FSM app is fine). Never do additional work on verbal approval alone — "I'll pay for it, just do it" without written sign-off is the #1 source of disputes.
6. Execute the approved work
7. Bill separately — change order line items stay separate from original scope on the invoice. Mixed line items get disputed at higher rates.

Change Order Documentation

Every change order form needs:

• Project / job reference number
• Date of change request
• Description of what changed and why
• Cost breakdown (labor + materials + overhead + profit)
• Schedule impact
• Customer signature / approval
• Tech signature

Authorization Thresholds

Note: these thresholds are pattern-based — no industry standard exists. Each company sets its own based on risk tolerance and tech experience.

Common Triggers and Cost Impact

Source: ContractorPlus 2026, HVACProSales