Almost every project has changes: an owner request, a design correction, an unforeseen condition behind a wall. How those changes are priced decides whether they are approved quickly or turn into months of back-and-forth. A good change order price is complete, clearly documented and easy for the owner or architect to check.
Know what the contract allows
Before pricing anything, read the changes clause in the contract. It usually defines:
- How changes are initiated and approved, and any notice period
- The allowed markups for overhead and profit, on your own work and on subcontracted work
- Whether time extensions must be requested together with the price
- How disputed changes are handled while work continues
Pricing a change with a markup the contract doesn't allow is a quick way to have it rejected.
Choose the pricing method
Changes are typically priced one of three ways:
- Lump sum: a fixed price for a defined change. It is the most common method and the easiest to approve when the scope is clear.
- Unit price: a rate per unit, such as per cubic yard of rock removed, useful when the quantity isn't known yet.
- Time and materials: actual labor hours, materials and equipment plus markup, for work that can't be defined in advance. It needs daily records signed off by the owner's representative.
Build the price like a small estimate
A change order should be priced the same way as the original bid, with its own take-off and line items. Include:
- Added work, with quantities and unit costs
- Deleted work, credited at the same rates used in the original estimate
- Demolition, rework and protection of finished work
- Subcontractor and supplier quotes, with their backup
- Extra general conditions if the change extends the schedule
- The contract markups, bonds and insurance
Using the original estimate's unit costs for both adds and deducts is the fairest approach and the hardest to argue with.
Don't forget time
A change that adds two days to the critical path costs more than its materials and labor. Supervision, equipment rental and site overheads all continue while the job runs longer. If a change affects the schedule, say so in the change order request and price the time. Waiving it quietly makes it very hard to claim later.
Tip: Number every potential change the moment it is identified, even before it is priced. A running log with dates and status is invaluable at closeout.
Document everything
Photos, daily reports, RFIs, emails and marked-up drawings all support a change order. The goal is that someone who wasn't on site can understand what changed, why, and how the price was built. Well-documented changes are approved faster and are far less likely to be disputed at the end of the job.
Price quickly
Changes lose value with time. The longer a change waits for pricing, the harder it is to separate its cost from the base work, and the more likely the work is finished before the price is agreed. Renovations like 701 Linden Avenue, where existing conditions only reveal themselves during demolition, are where fast pricing matters most. It is part of our project management support, working from the same estimate structure used at bid time.
