Bid Price, Change Order, and Verbal Authorization on a Clinic Cabling Package
A contractor licensed by the State of New Mexico is bidding a 22-drop Cat 6 data and camera package for a 9,000 sq ft clinic. The takeoff shows 22 cable runs averaging 140 ft, 22 faceplates and jacks at $14 each, and a $450 patch panel. Cable comes in 1,000 ft boxes at $190, and the crew will need 10 percent waste. Labor is estimated at 1.75 hours per drop plus 14 hours at the head end and 6 hours for testing and labeling, at a burdened rate of $72 per hour. The company applies 18 percent overhead to direct cost and 12 percent profit to the resulting subtotal. After the contract is signed, the owner adds 6 camera drops at the same average length and adds 1 hour of head-end configuration. The superintendent asks whether the crew can just do it and bill later because the ceiling closes Friday. The general contractor wants a price today and the owner's representative is on vacation.
1. Calculate the original bid price, showing material, labor, overhead, and profit.
Read the worked answer
Cable quantity: 22 runs × 140 ft = 3,080 ft. Add 10 percent waste: 3,080 × 1.10 = 3,388 ft. Order four 1,000 ft boxes = 4,000 ft at $190 = $760.
Other materials: 22 jacks/faceplates × $14 = $308; patch panel = $450. Materials total = 760 + 308 + 450 = $1,518.
Labor hours: 22 drops × 1.75 h = 38.5 h; plus 14 h head end and 6 h testing/labeling = 58.5 h.
Labor cost: 58.5 h × $72 = $4,212.
Direct cost: 1,518 + 4,212 = $5,730.
Overhead: 5,730 × 0.18 = $1,031.40; subtotal = $6,761.40.
Profit: 6,761.40 × 0.12 = $811.37; bid price = $7,572.77, rounded to $7,573.
State exclusions clearly in the proposal: sales tax, permits, conduit or core drilling, firestopping, ceiling access, and any owner-provided switches or cameras. The calculation is only as good as the takeoff; confirm the 140 ft average against the actual pathway before the price is fixed.
2. Price the 6-drop change order using the same rates and waste factor.
Read the worked answer
Cable: 6 × 140 ft = 840 ft; with 10 percent waste = 924 ft. At the box cost of $0.19 per foot: 924 × $0.19 = $175.56. Because the original job ordered 4,000 ft and used only 3,388 ft, about 612 ft remain; if that remnant is usable and undamaged, the true incremental cable cost may be near zero, but price the change order on the same basis as the base bid unless the contract says otherwise.
Jacks/faceplates: 6 × $14 = $84.
Labor: 6 × 1.75 h = 10.5 h; plus 1 h head-end configuration = 11.5 h × $72 = $828.
Direct cost: 175.56 + 84 + 828 = $1,087.56.
Overhead: 1,087.56 × 0.18 = $195.76; subtotal = $1,283.32.
Profit: 1,283.32 × 0.12 = $154.00; change order price = $1,437.32, rounded to $1,437.
Small-quantity changes often carry disproportionate mobilization, so consider a minimum charge or a stated small-order premium, but apply it consistently and disclose it. Confirm whether the additional cameras change switch port count, PoE budget, or license quantities; those items belong in the change order if they do.
3. Should the crew proceed on the superintendent's verbal direction? Address contract authority, licensing, permits, and schedule risk.
Read the worked answer
No. Verbal direction from a superintendent is not a contract change unless the contract specifically delegates that authority. Proceed only on a written change order signed by someone with binding authority, or a written field direction that obligates payment. The owner's representative being on vacation is a schedule problem, not a legal basis to work for free; send the priced change order by email, request written authorization to proceed, and state that work will begin on receipt.
Confirm that the firm's New Mexico license classification covers the added scope and that the qualifying party and insurance certificates are current. If the project requires a low-voltage permit or plan review, amend the permit before installing the added drops; inspections are tied to the permitted scope, and unpermitted work can delay the certificate of occupancy. Verify that the added cable pathways, firestopping, and separation from power are included, because Friday's ceiling closure will otherwise force expensive rework.
Document the schedule impact: if authorization does not arrive before the ceiling closes, state in writing that the added drops will require surface raceway or a later ceiling opening at additional cost. Protect lien and collection rights by keeping the signed change order, the proposal, and the email trail together in the project file.