You can't price a change order fast enough
The GC wants a number today. Getting one takes three days, so the work starts anyway and the price gets argued later.
Slow change pricing costs money twice: once in the concession you make to catch up, and once in the work performed before anybody agreed what it was worth. Speed here comes from having current rates on file, not from working faster. If your labor and equipment rates are current and the markup is already set, pricing a change becomes arithmetic somebody in the office can do the same morning. If they aren't current, you rebuild them from scratch while the GC waits and the crew keeps working.
Three moves, in order
Step 06: Project management
Billing dates, change orders, and notices, run as standards that hold without anyone chasing them.
Other problems step 06 solves
Other things that go wrong
What owners ask
How to price a change order construction?
The GC wants a number today. Getting one takes three days, so the work starts anyway and the price gets argued later. Slow change pricing costs money twice: once in the concession you make to catch up, and once in the work performed before anybody agreed what it was worth. Speed here comes from having current rates on file, not from working faster. If your labor and equipment rates are current and the markup is already set, pricing a change becomes arithmetic somebody in the office can do the same morning. If they aren't current, you rebuild them from scratch while the GC waits and the crew keeps working.
Which part of the system fixes this?
The step is number 06, project management. Billing dates, change orders, and notices, run as standards that hold without anyone chasing them. It's drawn from chapter 6 of CONTROL: The Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades in the benchmark reference, net profit at $1M–$5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack sits, and your own job costing tells you where you sit, which is the number that pays payroll.
Where do I start?
Keep a current labor and equipment rate schedule, with markup already set, so anybody in the office can apply it.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 06 depends on step 04, estimating system. Install it ahead of that and it produces numbers nobody trusts, which is worse than the problem you started with.
