Calculating the Cost of a Change
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You need a lot more than a calculator to determine and forecast change costs in construction.Changes on construction costs are inevitable. That means that often-difficult negotiations of the appropriate price for the change are also inevitable. The objective of this topic is to help systematically strip away the mystery, the magic, the misconceptions, and the uncertainty surrounding the pricing of changes. Contractors will learn what they must include to be made whole. Owners will learn both what they should pay and what they shouldn't pay. CMs and attorneys, and the consultants and accountants that advise them, will learn what is needed to accurately and persuasively price a change. The focus is on the hard topics - the legitimate damages associated with delay, the real costs of inefficiency, and the balancing concerns when pricing acceleration.
AuthorsBill Haydt, Esq., Trauner Consulting Services, Inc.
Methods of Calculating a Standard Change Order
• Actual Cost
• Standard Change Order Pricing
• Labor, Equipment, Material, Subcontractors
• Field and Home Office Overhead
Calculating Delay, Acceleration, and Inefficiency Costs
• Labor and Material Cost Escalation
• Idle Equipment
• Extended Field Overhead
• Home Office Overhead
• Interest, Bonds, Consulting and Legal Fees, Consequential Damages