Change Order Pricing: How to Price Construction Change Orders

Change orders are where estimating meets contract administration. A change priced quickly and loosely is easy for the owner to reject; one priced with clear quantities, rates and markups that follow the contract is much easier to get approved. This guide covers what goes into a change order price, how to handle time, and a worked example you can adapt.

For a shorter reference version, see our change order pricing guide.

Start With the Contract

Before pricing anything, read the changes clause. On AIA-based contracts, Article 7 of A201 (Changes in the Work) covers change orders, construction change directives and minor changes. Most contracts, AIA or not, define:

• Who can authorize a change and in what form (written change order, directive, field order)
• Notice deadlines for claims and time extensions, which can waive your rights if missed
• Allowable markups, often different for self-performed work and subcontracted work, and sometimes tiered for lower-tier subs
• Pricing methods: lump sum, unit prices already in the contract, or time and materials
• What is included in markup: some contracts say overhead includes supervision and small tools, so those cannot be added again as direct costs

The contract sets the rules. Your price should follow them line by line.

Components of a Change Order Price

1. Direct costs

• Material: quantities from a takeoff of the changed work, at current quotes, plus sales tax and freight
• Labor: hours from productivity rates, multiplied by a burdened labor rate (see our labor burden post)
• Equipment: rental or owned rates for the duration needed
• Subcontractor pricing: each affected sub’s quote, reviewed for scope and markup compliance

2. Deleted work (credits)

If the change removes work, price the credit the same way and net it against the added work. Owners often expect credits to carry markup too; check the contract.

3. Time and impact costs

• Extended general conditions if the change delays the critical path
• Productivity loss from disruption, stacking of trades, out-of-sequence work or overtime fatigue
• Remobilization if crews or equipment must return
• Escalation when the change pushes purchases into a later, higher-priced period

Impact costs are real but harder to prove. The most defensible approach is to document them as they happen. For productivity loss, one widely used method is the measured mile, which compares productivity on an unimpacted stretch of the same work with productivity on the impacted stretch.

4. Markups

Apply the contract’s allowable overhead and profit percentages, and bond and insurance costs if the contract permits them.

Worked Example: Pricing an Added Partition

Example: the owner adds a 60 ft long, 10 ft high interior partition with 3-5/8” metal studs at 16” o.c. and one layer of 5/8” Type X gypsum board each side, finished to Level 4. No openings. All prices, productivity rates and markups are illustrative 2026 assumptions; use your own quotes and the markups in your contract.

Quantities

• Wall area, one side: 60 ft x 10 ft = 600 SF
• Board area, both sides: 600 x 2 = 1,200 SF
• Sheets (4x12 = 48 SF): 1,200 / 48 = 25 sheets; plus 10% waste = 27.5, round up to 28 sheets
• Studs: (60 ft x 12 in/ft) / 16 in = 45 spaces, plus 1 = 46 studs at 10 ft
• Track, top and bottom: 60 x 2 = 120 LF

Material

Item	Qty	Unit cost	Extension
5/8” Type X board, 4x12	28 sheets	$20.00	$560.00
3-5/8” studs, 10 ft	46	$9.50	$437.00
Track	120 LF	$0.95	$114.00
Screws, tape, compound	1,200 SF	$0.25	$300.00
Material subtotal			$1,411.00
Sales tax, 8%			$112.88
Material total			$1,523.88

Labor

Task	Quantity	MH/SF	Man-hours
Frame	600 SF	0.020	12.0
Hang board	1,200 SF	0.015	18.0
Tape and finish, Level 4	1,200 SF	0.017	20.4
Total			50.4

Labor cost: 50.4 MH x $68.00/hr burdened = $3,427.20

Equipment

Rolling scaffold for the duration: $150.00

Roll-up

Line	Calculation	Amount
Direct cost	$1,523.88 + $3,427.20 + $150.00	$5,101.08
Sub overhead, 10%	$5,101.08 x 0.10	$510.11
Subtotal		$5,611.19
Sub profit, 5%	$5,611.19 x 0.05	$280.56
Subcontractor price		$5,891.75
GC markup on sub work, 5%	$5,891.75 x 0.05	$294.59
Subtotal		$6,186.34
Bond and insurance, 1.5%	$6,186.34 x 0.015	$92.80
Change order total		$6,279.14

Adding time

Suppose the added partition sits in a corridor that must be finished before flooring and ceilings can close out, and the schedule analysis shows it adds 3 working days to the critical path. If the contractor’s time-related general conditions run $1,850 per working day (illustrative), the extended GCs are 3 x $1,850 = $5,550, plus any markup the contract allows on that cost. Request the time extension in the same change order, even if the dollar value is small. Once a change is signed without time, recovering the delay later is difficult. Our general conditions post shows how to build a daily or monthly GC rate.

Forward Pricing vs. Time and Materials

• Forward pricing (lump sum agreed before work starts) gives the owner certainty and lets you proceed with an approved scope.
• Time and materials is used when scope cannot be defined in advance, such as concealed conditions. Get daily tickets signed by the owner’s representative and record crew names, hours, equipment and materials each day.
• Unit prices already in the contract should be used where they apply; check whether they include markup.

Documentation Checklist

• Written directive, RFI response or bulletin that created the change
• Notice sent within the contract deadline
• Scope description with drawing and spec references
• Quantity takeoff of added and deleted work
• Labor hours, rates and burden basis
• Supplier and sub quotes attached
• Markups applied as the contract states
• Schedule impact analysis and time extension request
• Photos and daily reports for field-condition changes

Common Mistakes

• Missing notice deadlines, which can forfeit the claim regardless of merit.
• Pricing the add but not the delete, which undermines credibility.
• Charging supervision as a direct cost when the contract says it is included in overhead.
• Applying the wrong markup tier to lower-tier subcontractor work.
• Signing without time when the change affects the critical path.
• Lump-summing everything with no quantities, which invites a line-by-line dispute.

How F&K Estimatings Can Help

We can take off and price change order scope from bulletins, revised drawings or RFI responses so your change order request has quantities and extensions behind it. This is part of our cost estimating services. See pricing for a quote.