Guide

How to bill approved change orders on your pay application

An approved change order is not money until it is on a pay app and certified. Approved changes left off the schedule of values are one of the quietest ways an electrical contractor loses cash flow, and sometimes the money itself. Here is how change orders get onto a G702/G703 pay app and how to keep any from slipping.

How a change order gets onto the pay app

Most commercial pay applications follow the AIA G702 (Application and Certificate for Payment) and G703 (Continuation Sheet) format, or a GC's version of it. Approved change orders show up in two places:

The G702 summary. Line 2, net change by change orders, adjusts the original contract sum. The change order summary box splits approved changes into those approved in previous months and those approved this month, as additions and deductions.
The G703 continuation sheet. Each approved change order gets its own line, with its scheduled value, work completed from previous applications, this period, materials stored, percent complete and retainage, the same as any base contract line.

Once a CO is on the schedule of values, you bill it by percent complete like everything else. A change that is 100% done the month it is approved can be billed in full that month.

Example continuation sheet lines

Item	Description	Scheduled value	Completed to date	%
Original contract lines	Feeders, branch, lighting, gear...	$1,240,000	$812,000	65%
CO-001	Added EV chargers, Level 2 (8)	$38,450	$38,450	100%
CO-002	Relocate site poles per ASI-4	$21,900	$10,950	50%
CCD-003 (interim)	Generator feeder reroute, NTE $60,000	$42,000	$42,000	Interim amount

Give every change its own line using the GC's CO number, not just yours. When the GC's pay app reviewer can match the line to their own log in a few seconds, it gets certified instead of questioned.

What you can bill, and when

Executed change orders

Once the CO is signed, add it to the schedule of values on the next pay app and bill the work completed. Check your subcontract for a cutoff: many GCs need the pencil draft by the 20th or 25th, and a CO approved after the cutoff waits a full month unless you ask.

Work under a construction change directive

On AIA A201 contracts, work performed under a CCD can be billed before the final price is agreed. A201 (2017) Section 7.3.9 has the architect make an interim determination for monthly certification, and Section 9.3.1.1 allows applications to include changes authorized by CCD that are not in a change order yet. Bill the interim amount, keep it on its own line, and true it up when the CCD becomes a change order. Your subcontract decides whether this flows down to you, so read the payment article. More on CCDs.

Pending and unapproved changes

Pending COs usually can't go on the pay app. Some GCs reject the whole application if they do. Keep pending changes on your CO log instead, and send that log with the pay app so the open dollars stay in front of the GC every month.

Retainage usually applies to change order lines too, at the same rate as the base contract, unless your subcontract says otherwise. Price that into your cash flow, and include CO retainage when you request reduction or release at substantial completion.

Why approved COs fall off the pay app

The CO was signed after the cutoff and nobody added it the next month.
The PM approved it in the field, but the person who writes the pay app never heard.
The GC issued the CO under their number and it never got matched to yours.
A partial approval (a lower amount than you submitted) was not entered at the approved number.
A CCD was billed at the interim amount and never trued up after the final price.
Small COs were held to "bundle later" and forgotten at closeout.

A monthly check before you submit

Every CO marked approved since the last pay app has its own SOV line.
Each line uses the approved amount, not the submitted amount.
The CO numbers match the GC's log.
CCD work has an interim line, and finalized CCDs are trued up.
The G702 change order summary agrees with the total of the CO lines.
Your open CO log goes out with the pay app.

Where software helps

Electrical Change Orders keeps the CO log with status and approved amount, flags every approved change that hasn't been marked billed on a pay app, and includes them in the follow-up reminders until they are. The job dashboard shows the total approved but not yet billed.

This guide describes common practice on AIA G702/G703 pay applications and A201 (2017). Your subcontract and the GC's pay application procedures control. The example figures are illustrative.