The Design Review That Caught a $1.2M Change Order

Change Order Definition: The Construction Industry Standard (AIA A201–2017)

A change order in construction is a written contract amendment, prepared by the architect and signed by the owner, contractor, and architect, that documents an agreed change to the work, the contract sum, and the contract time. The definition comes directly from AIA A201–2017 General Conditions, the dominant U.S. commercial construction contract framework. Without all three elements— scope, cost, and time— and all three signatures, the document is not a binding change order.

The American Institute of Architects¹ phrases it this way in its operative language:

"A written instrument prepared by the Architect and signed by the Owner, Contractor, and Architect stating their agreement upon all of the following: 1) the change in the Work; 2) the amount of the adjustment, if any, in the Contract Sum; and 3) the extent of the adjustment, if any, in the Contract Time."

A valid change order requires three elements:

• A change in the Work — the scope adjustment
• An adjustment in the Contract Sum — the cost impact (which can be zero)
• An adjustment in the Contract Time — the schedule impact (which can be zero)

It also requires three signatures: owner, architect, and contractor. The standard form is AIA G701-2017², and the architect— not the contractor— prepares it. Once all three parties sign, the change becomes part of the contract.

That is the contractual definition. But "change order" gets used colloquially to describe several mechanisms that are legally distinct. The next distinction is where most disputes start.

Change Order vs. CCD vs. Constructive Change vs. Cardinal Change

Four distinct mechanisms exist for changing scope, cost, or time on an AIA-contract project: a change order, a Construction Change Directive (CCD), a constructive change, and a cardinal change. They differ in who signs, when they are used, and what they obligate the parties to do. Conflating them is how disputes start.

A change order requires three signatures. A CCD requires two. A constructive change requires no signatures but does require prompt written notice. A cardinal change may not be a change order at all— it may be a breach.

A change order is fully agreed. All three parties signed and the contract is amended to match. A CCD³ is the mechanism owners and architects use when work cannot wait for the price negotiation— it is provisional and, per industry guidance⁴, every CCD eventually converts to a change order once cost and time are negotiated.

A constructive change is a different animal. No formal change order is issued, but the owner has directed the contractor to do work beyond contract scope, either explicitly or through conduct. The constructive change doctrine⁵ still permits the contractor to recover additional cost and time— provided the contractor gave prompt written notice. Under standard AIA A201⁶, that notice window is 21 days from the date the event giving rise to the claim is first recognized. Miss the window and the claim is at risk.

A cardinal change⁷ is a change so far beyond the original scope of work that courts may treat the agreement as breached rather than amended. The doctrinal test is whether the final project was essentially the same as what the parties originally contemplated. When it is not, the original contract may be terminated as a matter of law.

Knowing what a change order is matters less than knowing what causes one. Most are not surprises— they fall into recognizable categories, and some are preventable.

What Causes Change Orders — and Which Are Preventable

Change orders fall into three causal buckets: technical project development (errors and omissions in design documents), organizational culture (communication breakdowns, scope creep, owner-initiated changes), and financial or market uncertainty (unforeseen conditions, material cost shifts). Only the first is meaningfully prevented by design-review discipline.

The U.S. DOT Volpe Center's January 2025 report⁸ organizes change-order root causes into those three categories. In practical terms:

• Technical project development: errors and omissions in the design documents, missing coordination between disciplines, incomplete specifications. This is the preventable bucket.
• Organizational culture: owner-initiated programmatic changes, poor communication on the project team, scope creep that no one formally documents until it has compounded.
• Financial and market uncertainty: unforeseen subsurface or field conditions, material cost shifts, schedule disruption from supply chain.

Errors and omissions are the preventable category. Industry research⁹ suggests they should not increase project cost by more than about 5 percent. Anything beyond that signals a discipline problem, not a contract problem. This is why design-review discipline targets E&O specifically— it is the only causal bucket where the design team's process meaningfully changes the outcome.

The full picture is larger. On major projects, change orders typically run 10 to 15 percent of total contract value, per AIA¹⁰. Design-discipline firms run materially below that. At the industry level, a 2018 FMI/PlanGrid study estimated that rework and conflict resolution cost the U.S. construction industry more than $177 billion annually¹¹. Most credible studies put rework at 4 to 10 percent of total project cost¹², with the bulk of that traceable to coordination issues that should have been resolved in design.

Owner-initiated changes and truly unforeseen conditions sit outside what design review can prevent. That concession matters. Anyone who claims design discipline catches every change order is either over-promising or selling something. The honest framing: design review targets the preventable category and lets you measure your discipline against it.

The same cost-compounding logic applies elsewhere. We have written before about the hidden costs that compound on AI projects— the same dynamic at work in technology investments shows up here in physical construction. Catch it early or pay for it later.

If errors and omissions are the preventable bucket, the question is what "prevention" actually looks like in practice. Design review is the operational answer.

The Design Review Discipline That Caught the $1.2M

Design review catches preventable change orders through three coordinated mechanisms: scheduled milestone reviews at 50%, 75%, and 90% design completion; BIM-based clash detection between disciplines (typically MEP versus structural and architectural); and structured constructability review by senior practitioners who know what the field will reject. Industry data¹³ suggests that resolving a hard clash in design is roughly 25 to 30 times more cost-effective than resolving it in the field.

The three mechanisms work together:

• Milestone reviews (50/75/90% DD): scheduled checkpoints where senior practitioners review the document set against the program, the budget, and the schedule. The 75% milestone is where most catches happen— enough is drawn to expose conflicts, not so much that fixing them costs the team weeks.
• BIM clash detection: software-driven coordination between MEP, structural, and architectural disciplines. Per Tektome¹⁴, BIM-based clash detection can cut rework costs 40 to 50 percent— attributed carefully, because the precise multiplier traces to vendor-adjacent sources, but the directional ROI is well-supported.
• Constructability review: a senior reviewer with field experience walks the document set and asks the question the field will eventually ask. Not "is it drawn correctly," but "will the trades build it that way without a fight."

The $1.2M catch in the opening was an MEP-versus-structural clash: a 24-inch mechanical riser routed through a slab that had no penetration drawn for it. BIM clash detection surfaced the conflict. A senior reviewer at the 75% milestone confirmed it and pushed the redline. In the field, the same conflict would have meant cutting the slab, redesigning the riser route, demolishing finished work above and below, paying restitution to subcontractors thrown off sequence, and absorbing the schedule slip. Roughly $1.2 million. In review, it cost an hour.

The counter-argument shows up in every preconstruction meeting: "we cannot afford the design-review hours." At the 25-to-30x multiplier, the math runs the other way. Design-review hours are the cheapest hours on any project. The discipline is the durable thing. The toolset— Revit, Navisworks, Autodesk Construction Cloud— will keep evolving. The discipline will not.

The discipline is durable. The toolset will keep evolving— and the next layer of evolution is AI.

AI-Augmented Design Review — Extension, Not Replacement

AI-augmented design review extends what a senior practitioner can review, not what a senior practitioner is. The current generation of AI design-review tools can flag pattern-based issues across drawing sets faster than a human can scan— missing slab penetrations, duct-versus-beam conflicts, code-compliance gaps— and surface them to the reviewer for judgment. The reviewer still owns the judgment call.

The way to think about this: AI design review is intellectual augmentation, not artificial intelligence. It extends the catch rate of a discipline that already exists. It does not create the discipline.

What AI can do well today:

• Pattern matching across large drawing sets at speeds humans cannot match
• Code-compliance flags surfaced to the reviewer
• Refining BIM clash output by filtering the noise from the high-impact clashes
• Surfacing RFI patterns across projects so recurring issues become visible

What it cannot do:

• Judgment on which catches actually matter on this project
• Prioritization against budget, schedule, and owner relationship
• Reading the room with an owner whose program has shifted under everyone
• Constructibility intuition that comes from having stood on a job site

Firms that do not have a design-review discipline will not get one from a tool. Firms that do have one can scale it. For AEC principals trying to figure out where AI actually pays off in the firm, a decision framework for where AI fits in your firm is a more useful starting point than a tool demo. The toolset will turn over in two years. The discipline will not.

All of which leaves a practical question for the AEC firm running a $20M-$100M book of business: what does this mean Monday morning?

What This Means for $20M–$100M AEC Firms

For $20M-$100M AEC firms, the change-order discipline is competitive positioning. Owners comparing two firms with similar portfolios will pick the one whose preconstruction process credibly catches problems before they become field rework. That is what the design-review discipline buys.

A short Monday-morning checklist for principals and preconstruction directors:

1. Document your milestone review cadence. Write down what happens at 50%, 75%, and 90% DD— who is in the room, what gets reviewed, and who signs off. Informal review cannot be improved.
2. Require senior-reviewer sign-off at 75% DD. This is where most catches happen. A signature on the milestone is what makes it a discipline rather than a habit.
3. Institutionalize BIM clash detection between disciplines. Resolve MEP-versus-structural before it becomes field rework.
4. Track change-order causation by category. E&O, owner-initiated, field condition. You cannot manage what you do not measure— and the E&O percentage is the metric that tells you whether the discipline is working.
5. Bake the 21-day claim notice rule into your project-management SOPs. Per AIA A201⁶, that window is short and unforgiving.

Where AI fits is a separate question and a longer conversation. If mapping how AI maps to specific workflows in your preconstruction discipline is on the roadmap, an outside read can help— and how to measure whether AI is actually paying off matters more than which platform you pilot.

The $1.2M catch in the opening was not a tool decision. It was a discipline decision. Discipline first, tools second.

A few common questions surface around change orders and design review. Here are the short answers.

FAQ — Change Orders, CCDs, and Design Review

What is a change order in construction?

A change order is a written contract amendment, prepared by the architect and signed by the owner, contractor, and architect, that documents an agreed change to the work, the contract sum, and the contract time under AIA A201–2017. Without all three signatures and all three terms, it is not a binding change order.¹

Who signs a change order?

All three parties: owner, architect, and contractor. The architect prepares the G701 form; the contractor and owner sign to make the change binding.^{1 2}

What is the AIA G701 form?

The standard AIA form used to document and execute a change order. The current version is G701-2017. The architect prepares it; the owner, contractor, and architect sign it.²

What is the difference between a change order and a CCD?

A change order requires three signatures (owner, architect, contractor) and represents full agreement on scope, cost, and time. A Construction Change Directive requires only the owner and architect, and is used when work must proceed before cost and time are agreed. Every CCD eventually converts to a change order.^{3 4}

How much do change orders typically cost?

On major projects, change orders typically run 10 to 15 percent of total contract value.¹⁰ Changes driven by design errors and omissions are generally considered acceptable up to about 5 percent.⁹

What is a cardinal change?

A cardinal change is a change so far beyond the original scope that courts may treat it as a breach of contract rather than a contract amendment. The test is whether the final project was essentially the same as originally contemplated.⁷

Can a contractor get paid for changes without a signed change order?

Sometimes— under the constructive change doctrine, if the owner directed the work and the contractor gave prompt written notice.⁵ The practitioner standard is always: get the signed change order first.

How long does a contractor have to file a change-order claim?

Under standard AIA contracts, 21 days from the date the event giving rise to the claim is first recognized.⁶ Missing the window can waive the claim, depending on jurisdiction.

⚠️ EVERYTHING BELOW IS PIPELINE METADATA — NOT PUBLISHED

References

1. American Institute of Architects, "Construction Change Orders: Fundamentals, Process & Forms" (2024) — https://learn.aiacontracts.com/articles/6378493-the-fundamentals-of-change-orders-in-construction/
2. American Institute of Architects, "Instructions: G701-2017, Change Order" (2017) — https://help.aiacontracts.com/hc/en-us/articles/1500009322061-Instructions-G701-2017-Change-Order
3. American Institute of Architects, "Change Orders vs. Change Directives in Construction: Key Differences" (2024) — https://learn.aiacontracts.com/articles/construction-change-directives-vs-change-orders-understanding-the-differences/
4. Mastt, "What is a Construction Change Directive (CCD)?" (2024) — https://www.mastt.com/blogs/construction-change-directive
5. SGR Law (Smith Gambrell Russell), "Constructive Change: A Claim by Any Other Name" (2022) — https://www.sgrlaw.com/constructive-change-a-claim-by-any-other-name/
6. Young Architect, "What Is a Change Order in Construction? Complete Guide" (2024) — https://academy2.youngarchitect.com/change-order/
7. Long International, "Cardinal Changes in Construction: Definition, Doctrine, & More" (2023) — https://www.long-intl.com/blog/cardinal-change/
8. U.S. DOT Volpe National Transportation Systems Center, "Understanding Construction Change Orders" (January 2025) — https://www.volpe.dot.gov/project-delivery-center-excellence/understanding-construction-change-orders
9. The Construction Specifier, "Dealing with Errors and Omissions" (2018) — https://www.constructionspecifier.com/dealing-with-errors-and-omissions/
10. AIA Contract Documents, "The Truth About Change Orders" (2023) — https://learn.aiacontracts.com/wp-content/uploads/2023/07/The-Truth-About-Change-Orders.pdf
11. Trimble (citing FMI/PlanGrid 2018 "Construction Disconnected" study), "How poor design drives $177B in construction rework" (2024) — https://www.trimble.com/blog/construction/en-US/article/collaborative-design-sketchup-cut-construction-rework-costs
12. PlanRadar, "Cost of Rework in Construction: Causes, Data & Prevention" (2025) — https://www.planradar.com/us/cost-of-rework-construction/
13. ENG (BIM consultancy), "Clash Detection in BIM: How It Reduces Costs and Boosts ROI" (2024) — https://engbim.com/clash-detection-in-bim/
14. Tektome, "Why Early Design Decisions Make or Break Construction Outcomes" (2024) — https://tektome.com/expertise-center/blog/early-design-decisions