Change Order Management in Public Procurement 2026

Definition: Change order management refers to the structured process of early identification, documentation, evaluation, negotiation and settlement of change orders (contract modifications) in public contracts, with the aim of limiting cost increases, avoiding schedule delays and ensuring procurement law compliance.

Last updated: January 2026 · Legal basis: § 132 GWB, Art. 72 Directive 2014/24/EU, §§ 1, 2 VOB/B, § 382 BVergG 2018

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What is change order management?

Change order management is the systematic and proactive control of all performance deviations and contract modifications during the execution phase of a public contract – particularly in construction, but increasingly also in complex supply and service contracts. Effective change order management serves not only cost control, but also ensures that subsequent contract adjustments remain within the limits permitted by procurement law and do not become de facto contract awards.

According to studies by the Federal Court of Auditors and comparable institutions in Austria, inadequate change order management regularly leads to substantial cost increases in public construction projects, in individual cases exceeding 20–40 % of the original contract value.

Causes of change orders

Change orders typically arise from a combination of planning errors, incomplete specifications, unforeseen ground conditions or change requests by the contracting authority.

Common causes:

• Gaps or ambiguities in the bill of quantities
• Changed technical requirements during execution
• Unforeseen ground conditions (e.g. contamination, archaeological finds)
• Orders by the contracting authority under § 1 para. 3/4 VOB/B
• Price escalation clauses and material price changes
• Coordination problems between trades

Process of change order management

Structured change order management follows a defined process from change order notification to final agreement or contentious resolution.

Typical process phases:

1. Change order identification and notification: The contractor identifies a performance deviation and notifies the change order in writing (notification duty under § 2 para. 6 no. 1 VOB/B)
2. Change order calculation: The contractor submits a change order calculation based on the costing of the main bid
3. Procurement law review: The contracting authority checks whether the change order complies with the limits of § 132 GWB / Art. 72 Directive 2014/24/EU
4. Technical and commercial review: Review of the obligation to perform on the merits and the appropriateness of the change order price
5. Negotiation and agreement: Agreement on scope of services and remuneration, documentation
6. Contractual agreement: Written change order amendment or inclusion in the measurement

Procurement law dimension

From a procurement law perspective, change order management is a critical phase: change orders that exceed the permissible limits of § 132 GWB are to be qualified as inadmissible direct awards and may render the change order amendment void.

Contracting authorities should therefore:

• Define a change order strategy and internal approval thresholds in advance
• Keep cumulative change order totals in view (overall assessment)
• Seek procurement law advice for major change orders
• Comply with documentation duties under § 8 VgV (procurement record)

Preventive change order management

The most effective change order management starts before contract conclusion: A complete and unambiguous specification, together with clear change clauses in the contract, significantly reduces the potential for disputes.

Preventive measures:

• Careful preparation of the bill of quantities (no gaps, no contradictions)
• Inclusion of unit prices for additional services that experience shows to be frequent
• Definition of change processes and escalation paths in the construction contract
• Early site meetings and joint minutes

FAQ

What is the difference between a change order and a measurement dispute? A change order concerns additional or modified services; a measurement dispute concerns the quantity determination for services already contractually agreed.

Who bears the burden of proof for the entitlement to a change order? In principle the contractor: They must prove that the service claimed is not covered by the original contract and that the additional costs are causally linked to the change.

Can the contracting authority reject change orders across the board? No. If the contracting authority has ordered an additional service or the statutory conditions for a change order remuneration claim are met, the contracting authority must recognise the change order on the merits; only the amount can be negotiated.

Does the notification requirement also apply in Austria? Yes. § 1170 ABGB in conjunction with ÖNORM B 2110 also recognises notification and documentation duties for contractors.

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Last updated: January 2026 All information without guarantee. For legally binding information, please consult a law firm specialising in procurement law.