Managing Change Orders On-Site
Recognizing and documenting change
Change orders on site are about entitlement and timing. A change is work outside the contract scope: added area, upgraded product, unforeseen substrate repair, differing conditions, owner-directed acceleration, or a delay caused by another trade. Read the change clause before work starts. Send written notice within the required period. Use a daily time-and-material ticket signed by the general contractor's authorized representative; record labor hours, crew size, equipment, material, and areas. Photograph conditions before and after. A field directive is not a signed change order, but ignoring it may delay the job; proceed under written protest when directed and reserve rights.
Pricing the change
Price labor from quantity divided by a realistic production rate, then multiply by burdened rate. Include supervision, mobilization, small-quantity inefficiency, and cleanup. Price material at current cost plus waste and tax. Add equipment and overhead and profit exactly as the contract allows. Include schedule impact; a change that adds work but no time can still delay completion. Log every change with number, date, status, cost, and schedule days. Do not blend change work into the base contract billing.
Worked example
Add 1,200 sf of carpet tile. Material is $3.10 per sf with 5 percent waste; labor production is 350 sf per installer-day; burdened labor is $480 per day; combined overhead and profit is 15 percent; schedule impact is one day. Material = 1,200 × 1.05 = 1,260 sf × $3.10 = $3,906. Labor = 1,200 ÷ 350 = 3.43 days, rounded to 4 days × $480 = $1,920. Direct cost = $5,826. Overhead and profit = $5,826 × 0.15 = $873.90. Total = $6,699.90, rounded to $6,700, plus one day. If the contract limits overhead and profit to 10 percent, use that rate; do not apply both a markup and a separate fee unless the contract permits it.
Traps that cost marks
- Using the original bid unit price for a small, inefficient change.
- No signed T&M ticket or daily record.
- Missing the notice period.
- Submitting a lump sum with no breakdown.
- Forgetting waste, tax, supervision, or cleanup.
- Claiming schedule impact without showing the critical path.