How to price an electrical change order from a takeoff

In short: To price an electrical change order from a takeoff, find the sheets that changed, take off the added scope and the deleted scope separately, price both at current cost, adjust labor for the conditions the work will be done in, and apply the markup your contract allows for change work. Keep the change order’s quantities apart from the base contract. In TakeOn, you do that by tagging takeoff to a change order, which then prices as its own small bid.

Key takeaways

• A change order changes the scope and price of a signed contract. An addendum changes the bid documents before bid day; an alternate is a priced option inside the bid.
• Take off adds and deducts separately, then net the prices.
• Labor is where change orders lose money: out-of-sequence work, remobilising and supervision are easy to leave out.
• Your contract governs notice, allowed markup and who must sign.
• In TakeOn, takeoff tagged to a change order stays out of the base contract totals, and the Bid Summary shows Original bid, each change order, and Total Contract.

What is a change order, and how is it different from an addendum or an alternate?

A change order is a signed amendment to a construction contract that changes the scope of work and, usually, the price or the schedule. Three terms get mixed up:

Term	When	What it does
Addendum	Before bids are due	Changes the bid documents; every bidder prices the revised set
Alternate	In the bid	A priced option, quoted as an add or deduct to the base bid
Change order	After the contract is signed	Changes the contract’s scope and price

An addendum is folded into your bid number; see handling addenda and drawing revisions in a takeoff. A change order is priced and approved on its own.

What should a change order price include?

A change order price should include everything the change costs you, not only the new material:

• Added scope. Material and labor for what is new.
• Deleted scope. A credit for work removed that you have not yet bought or installed.
• Labor at the real conditions. Change work is often out of sequence: ceilings are closed, the lift is gone, the space is occupied. The same receptacle takes more hours than it did in the bid.
• The items that get forgotten. Remobilising a crew, supervision and project-management time, as-built updates, restocking charges on returned material, and any effect on the schedule.
• Markup. Overhead and profit at the rate your contract allows for change work, which may differ from your bid markup and may differ for credits.

Whether each of these is billable depends on the contract. Check your contract’s changes clause for notice deadlines, allowed markup, required backup, and who has to sign. This article is not legal advice.

How do you price a change order from the drawings?

You price a change order from the drawings in six steps:

1. Identify the changed sheets. Overlay each revised sheet on the one it replaces so nothing outside the clouded areas slips by.
2. Take off the added scope. Count and measure only what is new, separate from the base takeoff.
3. Take off the deleted scope. List the quantities removed, from your original takeoff, as their own set.
4. Price both at current cost. Use today’s material prices and your current burdened labor rate, not the numbers from bid day, unless the contract sets unit prices.
5. Adjust labor and apply the contract markup. Factor the added labor for the working conditions, then add overhead and profit as the contract allows. Contract percentages for change work are normally a markup on cost, not a margin; see markup vs margin in an electrical bid.
6. Document it. Attach the quantities, the sheets they came from, and the pricing breakdown, and submit within the contract’s notice period.

What does a worked change order example look like?

Here is an illustrative example with round numbers; none of these rates is a recommendation. An owner adds receptacles to a break room after the ceilings are closed, and deletes a few devices elsewhere that were never installed.

Line	Calculation	Amount
Added material	from the added takeoff	$1,800
Added labor hours	40 hours × 1.25 factor = 50 hours
Added labor	50 hours × $80 per hour	$4,000
Added cost	$1,800 + $4,000	$5,800
Deleted material	from the deleted takeoff	$300
Deleted labor	6 hours × $80 per hour	$480
Credit	$300 + $480	$780
Net cost	$5,800 − $780	$5,020
Markup at 15%	$5,020 × 0.15	$753
Change order price	$5,020 + $753	$5,773

Without the 1.25 labor factor, the added labor is 40 hours × $80, or $3,200, and the change order is underpriced by $800 before markup.

How does TakeOn keep change order takeoff separate from the base contract?

TakeOn keeps change order takeoff separate by tagging it. The takeoff panel has a Change orders list with a Base contract row and a row for each change order. Add a change order, make it active, and everything you draw from then on is tagged to it until you switch back to Base contract.

Each TakeOn change order has a name, a status (Pending, Approved or Rejected), a labor factor and a date. You can also:

• Hide on canvas or Show on canvas with the eye icon.
• Reassign takeoff you already drew: select it, and use the Change order dropdown in the properties panel.

The active change order and the active alternate are mutually exclusive. Selecting one clears the other, so a piece of takeoff belongs to the base, to one alternate, or to one change order.

Takeoff tagged to a change order is left out of the base totals, including the running totals, the export and the Bid Summary, so the original bid does not move when you draw the change.

How does TakeOn price a change order?

TakeOn prices each change order as its own small bid. The takeoff tagged to that change order is priced with the project’s Bid Summary settings, with the change order’s labor factor applied on top of any labor factors already set on the project. The factors multiply: a project factor of 1.10 and a change order factor of 1.25 give 1.375, so 40 takeoff hours price as 55.

In the Bid Summary, the Contract rollup section lists Original bid, each change order with its status badge and price, and Total Contract. Total Contract is the original bid plus Approved change orders only. The Contract rollup is not shown while a bid is finalized, because the locked snapshot holds only the base bid.

Two limits to know. A TakeOn change order uses the project’s Bid Summary settings as they stand, including overhead and profit, so if your contract sets a different markup for change work, check the result against it. And TakeOn does not yet calculate a credit for deleted scope; price the deduct yourself and net it on your form.

How do you send a change order proposal from TakeOn?

You send a change order proposal from TakeOn with the Generate CO proposal PDF action on the change order’s row. The PDF’s cover reads “Change Order” followed by the name, it prices that change order’s scope rather than the whole contract, and it leaves out the alternates list. It uses the scope, inclusions, exclusions and terms text saved in the project’s proposal editor, so update that wording to describe the change before you generate it.

Before you start a change order in TakeOn, save a checkpoint from the project page, so you have a restorable copy of the takeoff as it stood at contract.

The estimating features in TakeOn page covers the Bid Summary, alternates and proposals. Schedule a demo to see a change order priced from a revised sheet.