Changed work is where profitable jobs quietly turn thin. The labor and materials still get spent; the problem is that the revenue to cover them — plus overhead and profit — often never gets captured. Three mistakes cause most of it.
Mistake 1: Starting before it is approved
Doing the extra work first and pricing it later hands away leverage and, sometimes, payment. The strongest position is a written, priced, signed change order before the crew touches the change.
Mistake 2: Pricing only the materials
A change adds labor hours, and often equipment or a subcontractor, not just materials. Pricing the visible materials while eating the added labor is one of the most common ways changed work loses money.
Mistake 3: Ignoring the schedule
A change that pushes the calendar can add mobilization, extend overhead exposure, and disrupt the next job. If the change costs days, that impact belongs in the change order, not absorbed silently.
Price the change like a small job
Total the added direct cost, apply the overhead allocation, then price for the target margin — the same discipline as the original bid. A $1,486 change at a 25% margin prices to about $2,219, not just the cost of the extra materials.
Frequently asked questions
What is the most costly change order mistake?
Starting the changed work before it is priced and approved in writing, which gives away both leverage and sometimes payment.
How should added work be priced?
Total the added direct cost, apply overhead, and price for the target margin, the same way as the original bid.
Does a change order need to cover schedule impact?
Yes. If the change costs days, that impact belongs in the change order rather than being absorbed silently.