FIND A CONTRACTOR BUYER'S GUIDE
BECOME AN INDUSTRY PARTNER
MCAA Logo
MEMBER LOGIN JOIN
NEWS
World of Concrete 2026 Registration Is Open ↗

The Fine Art of Pricing Change Orders

Words: Paul AaronIt's an unfortunate fact: Contractors have to "sell" change orders, even changes requested by the owner that everyone recognizes as valid. It's part of the normal course of project management and it's frustrating. And even if the scope of work is not in dispute, the price can be a different matter.

Assuming unit prices have not been established for additional work, these tips might help you overcome defenses to your price.

Provide a Detailed Description of the Additional Work

  • Use commonly understood terminology that everyone understands. If your work contains trade-specific technical terminology, explain it in simpler terms.

  • Identify exact location of work and be specific to a fault. Use plan page numbers and details, grid lines, phase, building and room numbers, etc.

  • State why additional costs are being passed on. Reference the initiating and confirming document or event. What confirmed the owner's acknowledgement of additional costs?

    Provide a Detailed Price Breakdown

  • Breaking your price down and showing detail of the work sequentially educates the other side. Also, realize that individual line items now become negotiating points.

  • The estimating fact at play here is that the more detailed the cost estimate, the higher the price. An added bonus is we're forced to consider the cost for every detail of the work when we break it down and are less likely to forget small elements.

    Show Contract "Approved" OH and Profit Amounts

  • Include the difference between contract "approved" OH and Profit and your real amount for OH&P in your labor and equipment rates.

  • Agreeing upon unit rates for labor and equipment that are higher than those reflected in the project bid is a must if you hope to recover the difference between what the contract allows for OH and what your actual overhead (G/A) costs are.

    Use Real Invoice Pricing for Material Purchased Specifically for This Change Order Work

  • You won't need to inflate these prices if you have done what we suggested in the previous section.

  • Many contractors pad material costs in an effort to make up their OH costs.

    Use "Retail Shelf Pricing" for Materials Already on Site

  • That is for materials taken out of project inventory.

  • You'll have to replace this material at a price greater than your original purchase price (assuming quantity pricing at bid time and increased materials costs during the course of construction).

    It's never a perfect art or science, but incorporating the above into your change order processes will give you a better chance at winning in the change order game.

    •  0
    Midwest Cast Stone Continues as a Gold in the 2026 Masonry Alliance Program
    October 2025

    Industry News
    Read More
    Ending Lost Wisdom: Our Generational Knowledge Project
    October 2025

    The MCAA's Generational Knowledge Project represents the next evolution of support for young masonry professionals. Its initial launch in 2026 will capture wisdom from nine industry titans through GEORGE AI-powered interviews and on-demand mentorship.

    Dan Kamys
    Industry News
    Read More
    Instone Renews Gold Partnership in the 2026 Masonry Alliance Program
    October 2025

    The Mason Contractors Association of America (MCAA) is excited to announce that Instone will be renewing its Gold partnership in the 2026 Masonry Alliance Program.

    Industry News
    Read More
    MASONRY STRONG Podcast, Episode 31 Recap: James Hoskinson, President at Lang Masonry Group
    October 2025

    On this episode of the MASONRY STRONG Podcast, James Hoskinson comes on the set to discuss his journey in the masonry industry and tell his story on how how he ended up where he is today. Starting Out: The Accidental Mason James didn’t set out to be a m

    Justin Stengel
    The MASONRY STRONG Podcast
    Read More