Change Order Pricing Calculator
Item Breakdown
| Description | Material | Labor | Direct Total |
|---|---|---|---|
| Additional framing | $2,000.00 | $1,800.00 | $3,800.00 |
This change order calculator builds a defensible price for added or deleted scope by stacking direct costs and then layering the standard contractor markups on top. You enter line items for material and labor, add lump-sum equipment and subcontractor costs, and the tool applies overhead, profit, and a bond adjustment in sequence. It also divides the total by any schedule impact in days to show a cost-per-day figure useful for time-and-materials negotiations.
Formula
Total = ((Direct × (1 + OH)) × (1 + Profit)) × (1 + Bond), where Direct = Material + Labor + Equipment + Subcontractor
- Direct
- Direct cost subtotal: material + labor (hours × rate) + equipment + subcontractor
- OH
- Overhead rate as a decimal (e.g. 15% = 0.15)
- Profit
- Profit rate as a decimal, applied after overhead
- Bond
- Bond/insurance adjustment rate as a decimal, applied last
How it works
- Add one or more line items, each with a description, material cost, labor hours, and labor rate. Labor cost for a line is hours multiplied by rate, and the direct cost of the line is material plus labor.
- Enter lump-sum equipment and subcontractor costs. These are added to the summed material and labor totals to form the direct cost subtotal.
- Set the overhead, profit, and bond rates (defaults 15%, 10%, and 1%). The calculator applies them in a compounding chain — overhead on direct cost, profit on the overhead-inclusive subtotal, then bond on the profit-inclusive subtotal — and divides the grand total by the schedule impact in days for a cost-per-day value.
Worked example
A change order with $5,000 material, 40 labor hours at $65/hr, $3,000 equipment, and $8,000 subcontractor, using default 15% overhead, 10% profit, and 1% bond, with a 10-day schedule impact.
- Labor cost: 40 × $65 = $2,600. Direct subtotal: 5,000 + 2,600 + 3,000 + 8,000 = $18,600.
- Overhead: 18,600 × 15% = $2,790, giving a subtotal of $21,390.
- Profit: 21,390 × 10% = $2,139, giving a subtotal of $23,529.
- Bond: 23,529 × 1% = $235.29, giving a total of $23,764.29. Cost per day: 23,764.29 ÷ 10 = $2,376.43.
Total change order value is about $23,764.29, with roughly $2,376.43 of cost attributed to each of the 10 added schedule days.
Frequently asked questions
- Why are overhead, profit, and bond applied in sequence rather than all at once?
- The markups compound: overhead is added to the direct cost, profit is then calculated on that overhead-inclusive subtotal, and the bond adjustment is applied to the profit-inclusive subtotal. This mirrors how most prime contracts and the standard markup chain price a change order, so the bond covers the full marked-up amount.
- What overhead and profit rates should I use?
- Many contracts cap change order markups, commonly around 10–15% for overhead and 10% for profit, though the exact limits are set in the contract general conditions. The calculator defaults to 15% overhead, 10% profit, and 1% bond, but you should override these to match your specific agreement.
- What does the cost-per-day figure represent?
- It is simply the total change order value divided by the number of schedule-impact days you enter. It is a quick reference for negotiating time-related compensation, not a substitute for a detailed extended-overhead or delay-damages analysis.
- Does this calculator handle deductive (credit) change orders?
- The tool is built for additive scope and clamps negative cost inputs to zero. For a deductive change order, price the removed scope as a positive value and apply it as a credit in your contract documents, since markups on credits are often negotiated differently.