In the context of cost-plus contracts, a change order refers to a formal document that outlines modifications to the original scope of work, specifications, or terms of the contract. Cost-plus contracts are agreements where the client agrees to reimburse the contractor for the actual costs incurred in addition to a predetermined fee or percentage of those costs.

The proposed change is evaluated to determine its feasibility, impact on cost and schedule, and any other implications. Both parties, the client, and the contractor must agree to the proposed change and its associated costs before it can be approved.

Once approved, the change order is documented in writing, detailing the nature of the change, any adjustments to the scope of work, costs incurred or saved, and any modifications to the project timeline. Signatures from both parties are typically required to formalize the change order.

In cost-plus contracts, the contractor is reimbursed for the actual costs incurred, including any additional costs resulting from approved change orders. Therefore, accurate documentation of costs associated with change orders is crucial for proper reimbursement.

Change orders in cost-plus contracts help maintain transparency and accountability by providing a clear record of changes to the project scope and associated costs. This helps ensure that both parties understand the reasons for changes and agree to the adjustments in cost and schedule.