When should a change order be placed in the customer hands? after or before the change order work is done?
1 reply
Oct 22, 2020
A change order in which a fixed price, including overhead and profit, has been negotiated upfront should be executed before the work begins. A change order that cannot easily be priced upfront is usually done on a time and materials basis, in which costs are accumulated as the work progresses and an actual cost for the change order is calculated at the end of the change order work. That number is usually increased by an overhead and profit factor that is often included in the original contract. If it is not included in the original contract, that factor should be negotiated prior to beginning work on the change order.