Quick question, does anyone know the steps to credit something that was bided on a new change order? Foe example if you bided a (10) 2x4 lay in fixtures and a new revision wants to remove 5 2x4 lay in fixtures and add 5 down lights instead, how would you go about crediting back for this fixtures that were removed and charge for the new downlight labor and material. Hopefully it makes sense. Am trying to learn the estimating process and I notice this comes up quite a bit with the company that I work for right now. Please comment or send me an email if you can help.
Change order
- Thread starter pepevegac
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Were the fixtures purchased as part of the project package?
Are they onsite already?
If they are I would not give them credit for the fixtures, only the labor.
I would turn over the fixtures to the client at the end of the project.
Do not credit back overhead and profit on the change order.
Are they onsite already?
If they are I would not give them credit for the fixtures, only the labor.
I would turn over the fixtures to the client at the end of the project.
Do not credit back overhead and profit on the change order.
mkgrady
Senior Member
- Location
- Massachusetts
Ok this help out alot, no refund on profit and overhead, if material was baught and on site, no refund for material. You hand them their material/equipment and just refund the labor for the installation if it hasn't been installed. Now isthis refund/credit based on original contract labor and and material? That is, using the labor rate and labor hours/units used to bid the job? And any item added after contract gets priced at change order labor rate and higher labor hours/units? For example: credit at contract rate and hours $30hr and lower labor units.
Change order items after contract at $50hr and higherlabor units
I hope it makes sense, please comment. Thanks!
Hope is not too much to ask.
Change order items after contract at $50hr and higherlabor units
I hope it makes sense, please comment. Thanks!
Hope is not too much to ask.
I forgot, how would you present this change order request/credit to the contractor in writing? Material extensions, hrs, rate. And would the credit be a revision to the proposal or contract to a lower price? Ex. Contract @40,000, revised with credit to $37,000. Is this how it works?
rltomkinson
Member
- Location
- Charles Town, WV
If the fixtures were part of the original bid, I would credit the labor back at the bid price ($30/hr). If they were part of an earlier change order, I would credit the labor back at the labor rate used in that change order (but not everyone would). If the fixtures were already installed, I would not give a credit at all, but charge him to remove the fixtures.
As for showing the credit to the owner, I would make it a separate line item on the change order proposal so that he can see it clearly.
Thanks a lot, this info helps me understand how a change order could be presented. Am assuming that When the contractor or the owner sees two different labor rates and labor units for what's being credited and what's vein added as a C C Order would be ok? Or are they going to question the difference between one rate and another?
Thank you very much, this is really helping me understand how changes get done
Thank you very much, this is really helping me understand how changes get done
nyerinfl
Senior Member
- Location
- Broward Co.
Don't modify the main contract. Don't break out your labor or material. The main contract is the main contract and needs to be looked at as a seperate item altogether. Submit a change order for the changes, if the changes turn into a credit then so be it, but it shouldn't actually modify the contract itself, only your final or possibly a partial payment should be 'x' amount less because of the applied change order 'credit'.
example;
remove 2x4 light fixture. qty; 5 @ $150/ea - $750 deduction
Install down light. qty; 5 @ $100/ea - $500
This leaves your total as a $250 credit. Submit it and let the GC or person paying you sort it out on their end.
Give unit pricing, you're not their employee you're a contractor, unless a set change order rate of say $70/hr is set into the contract.
example;
remove 2x4 light fixture. qty; 5 @ $150/ea - $750 deduction
Install down light. qty; 5 @ $100/ea - $500
This leaves your total as a $250 credit. Submit it and let the GC or person paying you sort it out on their end.
Give unit pricing, you're not their employee you're a contractor, unless a set change order rate of say $70/hr is set into the contract.
mkgrady
Senior Member
- Location
- Massachusetts
The numbers are not important but here is the concept of how I would do it.
Credit labor to install deleted fixtures -10,000
Deliver unused fixtures to owner 1,000
Replacement fixtures material cost 5,000
Labor to install replacement fixtures 10,000
Extended field overhead 500 per day x 20 days 10,000
Manlift rental 100 per day x 5 days 500
Total cost of change $16,500
Overhead on cost at 18% 2,970
Profit on cost at 10% 1,650
Total change amount $21,120
Credit labor to install deleted fixtures -10,000
Deliver unused fixtures to owner 1,000
Replacement fixtures material cost 5,000
Labor to install replacement fixtures 10,000
Extended field overhead 500 per day x 20 days 10,000
Manlift rental 100 per day x 5 days 500
Total cost of change $16,500
Overhead on cost at 18% 2,970
Profit on cost at 10% 1,650
Total change amount $21,120
mkgrady
Senior Member
- Location
- Massachusetts
You could claim that there is more overhead cost involved in performing the change. It would be hard to justify not giving back profit on the deleted work.
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