OH&P 5%!!!!!!

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highpowered

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It has been brought to my attention that The corporation I'm working for only allows 5% OH&P on C/O's? Since this was not in my contract with the GC am I obligated to abide by this? Not to mention its insane. Lastly do I even mention this and just mark eveything up to meet what my company requires and just make it look like I added there ridiculously low ball ohp. Is theire a standard of which a corporation has access to that they go by when checking change order numbers?
 
highpowered said:
It has been brought to my attention that The corporation I'm working for only allows 5% OH&P on C/O's? Since this was not in my contract with the GC am I obligated to abide by this? Not to mention its insane. Lastly do I even mention this and just mark eveything up to meet what my company requires and just make it look like I added there ridiculously low ball ohp. Is theire a standard of which a corporation has access to that they go by when checking change order numbers?
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Your obligation is whatever your contract says. If your contract is silent about changes you have no obligations and your customer has no right to even make changes. Of course in the real world you probably should negotiate something acceptable to all parties but I would not agree to perform changes at 5%. At that rate you would be doing changes below your cost of doing business.
 
Let's see....
OK, please bid on a 2000 sq foot installation with 200A service and 20 circuits. Then I will issue a change order to 20,000 square foot, 2000A service and 200 circuits. Hold the OH on that C/O down to 5% please. :)
 
most contracts seem to allow for 15% for OH on changes.

if you do not like the proposed terms, you can opt out.

I think you will find that the GC is probably using some means of looking at your billings for changes to make sure they are in expected ranges. there are all kinds of construction pricing guides for them to check that will tell them if you are cheating on the change orders.
 
highpowered said:
It has been brought to my attention that The corporation I'm working for only allows 5% OH&P on C/O's? Since this was not in my contract with the GC am I obligated to abide by this? Not to mention its insane. Lastly do I even mention this and just mark eveything up to meet what my company requires and just make it look like I added there ridiculously low ball ohp. Is theire a standard of which a corporation has access to that they go by when checking change order numbers?
Click to expand...

Before you assume that your contract doesn't obligate this to you, review it for the standard statement that you are bound to the conditions of the GC's contract with the owner. I have this coming up more and more. I am locked in to 10% right now. Rather than fight the tide, make sure that you charge for every item that isn't indirect overhead. Make up a form. A few thing to not forget. Warehouseman, estimating, Project Management, truck fuel. printing cost, even an 8 1/2 by 11 piece of paper, but especially prints. Cost to update as-builts. Foreman supervision. If the change order call for 3 connectors, buy a box, and turn the rest over. Be careful about hiding too much because most contracts require you to certify costs and they may insist. Also, make sure you have a line on every change order that requests and extension of time. If they don't want an extension they can pay overtime rates. Then if you get in to crunch time later and they tell you to work overtime you have a document backing up your request for OT.

If they try to argue about any of the above costs and claim they are overhead, point out that they are not. They are direct costs associated with that change order. If you didn't have the change order you would expend any of those costs.


BTW, I suggest you feel out your GC as well. My Project manager for example is on my side. He didn't write the 10%, so I am not making him mad when I submit for these costs.
 
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