Glossary · Change & Conversion
Scope of work
In short
What the contract commits the contractor to do. Whether a change order relates to it decides both the change order's tax treatment and whether its dollars count toward the threshold.
In full
Scope of work is what a contract commits the contractor to perform. Two of Arizona's change-order rules depend on it, and the statute does not define it.
A change order that directly relates to the scope of work of the original contract is treated the same as the original contract, regardless of the amount of modification activity the change order contains. A change order that does not directly relate to that scope of work is treated as a new contract, and the treatment of any later change order follows the contract whose scope of work it directly relates to.
The alteration threshold applies the same test. A change order that directly relates to the scope of work of the original contract is treated as part of that contract, and the contract amount includes any amount attributable to it.
So one question — does this change directly relate to the original scope of work — decides both whether a change order inherits the original contract's classification and whether its dollars are added to the contract amount. Neither A.R.S. § 42-5075 nor ADOR's contracting pages define what makes a change directly relate to a scope of work.
A.R.S. § 42-5075(P)(2), (S)(1)(e)