Cole Law Partners Attorneys Examine Change-Order Risk for Subcontractors

Cole Law Partners, P.C. attorneys J. Nathan Cole and Herling D. Romero Adrianza recently authored an article for Modern Contractor Solutions examining one of the most common financial risks subcontractors face: performing changed work before the price and payment terms are fully resolved.

In “The Right Routine for Subcontractors: Don’t Let Change Orders Become Unpaid Loans,” Cole and Romero Adrianza explain how informal field directives can quickly create significant exposure. A superintendent may direct work to proceed immediately, but questions involving scope, pricing, schedule impact and payment can remain unresolved long after the labor and materials have already been provided.

The article emphasizes the importance of creating a disciplined change-management process that can be followed in the field. Key practices include documenting directives promptly, tracking changed work separately, identifying schedule impacts, maintaining dedicated cost records and providing timely written notice.

Cole and Romero Adrianza also caution subcontractors to account for the full financial impact of changed work – not simply the immediate labor and materials. Depending on the circumstances, additional impacts may include supervision, equipment, procurement costs, overhead, delays, productivity loss, overtime and acceleration.

Another critical consideration is avoiding the accidental release of unresolved claims through routine documents such as pay applications, lien waivers and change-order forms. The authors recommend comparing these documents against outstanding claims and clearly preserving unresolved items before signing.

Ultimately, the article reinforces a simple principle: documentation is leverage, not paperwork. Subcontractors that identify changed work early, document it separately, price the full impact and escalate unresolved items before they become disputes are better positioned to protect both project relationships and their right to payment.

Author notes: J. Nathan Cole is a Founding Partner at Cole Law Partners, P.C. and represents businesses, contractors and manufacturers in construction and commercial litigation matters. Herling D. Romero Adrianza is a Senior Associate whose practice includes complex commercial disputes, construction litigation, employment matters and general civil litigation.