Change Orders
- Thread starter Kevine
- Start date
- Status
Steve Beranek
Member
- Location
- St. Louis, Missouri
Have you already started the job, is the material already on site?
If so, then you have to handle the paperwork and hassle of return the goods, and when the new change orders for additional comes in, you then have to handle, trying to get the best deal, and then getting the material to the site.
That help any?
If so, then you have to handle the paperwork and hassle of return the goods, and when the new change orders for additional comes in, you then have to handle, trying to get the best deal, and then getting the material to the site.
That help any?
ksmith846
Senior Member
- Location
- Port St Lucie, Florida
They have to understand that they received a great low price for you to even get the job. Now if they want to make changes they have to pay you full price or they do not get the extras.
I go through this on almost every job.........going in to get the job I am using Labor rates that only include burden and overhead (for me that's $28.50/hour).........on change orders I charge $35 hour. I am with you on this one if they delete something that price is based off of what I used to get the job. Change order pricing has nothing to do with my cheap bid pricing.
I go through this on almost every job.........going in to get the job I am using Labor rates that only include burden and overhead (for me that's $28.50/hour).........on change orders I charge $35 hour. I am with you on this one if they delete something that price is based off of what I used to get the job. Change order pricing has nothing to do with my cheap bid pricing.
- Location
- Chapel Hill, NC
- Occupation
- Retired Electrical Contractor
I would state that I bid this job with a shoe string budget in order to get the job. The price that you deduct is what you bid. The price of the increases is what you need to do to make money and to pay for your time to bid and organize the changes.
You have a cost with any change order that will increase the size of a add change order or decrease the size of a deductive change order.
These include:
1) Time to visit the site and look at work to be done.
2) Time to calculate the cost of the change.
3) Time to write up the change order.
4) Meet with the Architect and Engineer and explain your change order costs.
There are probably some more I am not thinking of right now. An add change order will also cost more if they do not give you extra time on the schedule. If they expect an increased scope of work in the same amount of time it will cost you and them more.
A GC friend of mine once questioned me about another EC's change order. It was a deduct change order that was a positive dollar amount. I told him I could very easily see that happening. He wasn't happy but agreed after I explained it.
These include:
1) Time to visit the site and look at work to be done.
2) Time to calculate the cost of the change.
3) Time to write up the change order.
4) Meet with the Architect and Engineer and explain your change order costs.
There are probably some more I am not thinking of right now. An add change order will also cost more if they do not give you extra time on the schedule. If they expect an increased scope of work in the same amount of time it will cost you and them more.
A GC friend of mine once questioned me about another EC's change order. It was a deduct change order that was a positive dollar amount. I told him I could very easily see that happening. He wasn't happy but agreed after I explained it.
petersonra
Senior Member
- Location
- Northern illinois
- Occupation
- engineer
We actually have a spreadsheet form that prices and summarizes change orders.
You just put in the extra labor, at whatever price was agreed to up front, and the price of the extra parts plus a modest markup (also agreed upon up front).
If parts are deleted, the cost of those parts is a deduct, not including the markup. Costs associated with returning the parts, if any are added in such as shipping and restocking fees.
The labor in the C.O. includes the time it took to create the change order, the time it took the shipping clerk to repackage any returned goods, and whatever other labor is associated with the changes. Engineering, drawing and BOM updates, whatever.
Usually we just print out the summary sheet and ask them to sign on the line where it says approved. The fact that we have a system in place for this kind of thing, and that it is disclosed upfront tends to all but eliminate complaints about change orders.
It's not unheard of, but admittedly rare, for a customer to end up with a net deduct.
Most of the time it is the engineer who prepares these things, and most of us are unwilling to nickel and dime customers so a few hundred dollars on a $50,000 project won't result in a C.O. most of the time. We do keep track of the changes though, so if they start to get burdensome we can send the customer a C.O.
You just put in the extra labor, at whatever price was agreed to up front, and the price of the extra parts plus a modest markup (also agreed upon up front).
If parts are deleted, the cost of those parts is a deduct, not including the markup. Costs associated with returning the parts, if any are added in such as shipping and restocking fees.
The labor in the C.O. includes the time it took to create the change order, the time it took the shipping clerk to repackage any returned goods, and whatever other labor is associated with the changes. Engineering, drawing and BOM updates, whatever.
Usually we just print out the summary sheet and ask them to sign on the line where it says approved. The fact that we have a system in place for this kind of thing, and that it is disclosed upfront tends to all but eliminate complaints about change orders.
It's not unheard of, but admittedly rare, for a customer to end up with a net deduct.
Most of the time it is the engineer who prepares these things, and most of us are unwilling to nickel and dime customers so a few hundred dollars on a $50,000 project won't result in a C.O. most of the time. We do keep track of the changes though, so if they start to get burdensome we can send the customer a C.O.
Last edited:
JeffD
Member
- Location
- cleveland, oh
MJW is right. Also don't forget the costs for the new prints with the change on them and the electrician changing out dwgs.
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