Calculating the Cost of a Change – OnDemand



You need a lot more than a calculator to determine and forecast change costs in construction.

Changes on construction costs are inevitable. That means that often-difficult negotiations of the appropriate price for the change are also inevitable. The objective of this topic is to help systematically strip away the mystery, the magic, the misconceptions, and the uncertainty surrounding the pricing of changes. Contractors will learn what they must include to be made whole. Owners will learn both what they should pay and what they shouldn’t pay. CMs, attorneys, and the consultants and accountants that advise them will learn what is needed to accurately and persuasively price a change. The focus is on the hard topics – the legitimate damages associated with delay, the real costs of inefficiency, and the balancing concerns when pricing acceleration. Review the sometimes controversial areas of unabsorbed home office overhead, interest, and consequential damages.

Learning Objectives

  • You will be able to define methods of calculations.
  • You will be able to explain the difference between standard versus impact change orders.
  • You will be able to identify delay, acceleration, and inefficiency costs.
  • You will be able to discuss mitigation of impact costs.