Checklist for pricing construction project change orders and claims

In the hectic day-to-day world of managing a construction project, it can be difficult to make sure you are including all costs that result from a change to your scope of work, whether you are pricing a proposed change order or a claim. While your contract likely addresses which specific time and cost impacts you can, and cannot, include in a change order or claim, the following checklist can help to make sure you are not leaving things on the table. This is particularly important as more and more contracts and change order forms include cumulative impact and other waivers such that pricing the change order will be your “one bite at the apple” to recover any and all costs and related impacts. 

You should consider the following categories when pricing change orders and/or claims:

Scope change

  • Price of work
    • Direct costs
      • Labor
      • Material
      • Equipment
    • Estimating time
    • Project management time
    • Purchasing
    • Overhead and profit
    • Additional bond premium, if any
    • Additional insurance premium, if any
  • Additional time if necessary
    • If no additional time available, re-price accordingly

Delay/acceleration/impact

  • Direct costs
    • Increased labor or material costs due to delay, if any
  • Supervision
    • Direct costs of superintendent
    • Additional project management time
  • General Conditions
    • Field office
    • Utilities
    • Temporary facilities
    • Any other time driven cost that is charged to the job – use the daily rate x number of days
  • Equipment
    • Additional rental charges or owned equipment costs
  • Unabsorbed home office overhead
    • Use HOOP or Eichleay formula. (Eichleay formula only available if you are on standby and don’t know when you will start up again, such that you have to keep personnel, equip., etc. ready and waiting to go back to work.)
  • Demobilization/remobilization
    • May impact HOOP or Eichleay availability if left site
  • Overtime – Premium portion of overtime only
  • Lost productivity/inefficiency
    • Measured mile, modified total cost, etc. – hard to prove even though you know you experienced it
    • Effect of working overtime and impact on productivity – if you work extended periods of overtime without a break, efficiency is impacted.
  • Overhead and profit
  • Additional bond premium, if any
  • Additional insurance premium, if any
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