Protect the margin on added scope

Contractor Change-order Price Builder

Build an internal pretax price for added work from direct labor, adjusted materials, subcontractors, mobilization, disruption, reserve, and target gross margin.

Planning estimateFormula v1.0.0Reviewed July 31, 2026

What it answers

See the complete direct change cost before applying one clearly selected pricing method.

Runs locally

Local workspaceInputs are not sent anywhere

Scope

Change context

Descriptions stay in this browser and are included only when you explicitly save or export.

Change description (optional)Existing base contract value$Optional; used only to show a revised contract total.Prior approved change-order total$Optional; excludes the change being priced now.

Labor

Added labor

Use fully burdened direct-cost rates, not customer-facing selling rates.

Labor row 1

Role nameAdded regular hourshoursDirect cost rate$/ hourOvertime hourshoursOptional.Overtime direct cost rate$/ hourIf blank, overtime uses the regular direct-cost rate and returns a warning.

Direct costs

Materials and allowances

Tax is excluded from the Release A calculation.

Material cost before waste$Material waste%Applied once to the entered material cost.Subcontractor cost$Direct cost for outside trade work.Equipment cost$Rental or job-specific equipment cost.Vehicle or mobilization$Job-specific travel, delivery, or setup cost.Permits or inspection fees$User-entered fees only.Schedule-disruption allowance$Direct allowance for resequencing or interruption.Callback or warranty reserve$Optional direct reserve for this scope change.Other direct cost$Any remaining cost attributable to this change.

Pricing

Margin target

One whole-change gross-margin method is applied. Line-item markups are not stacked.

Target job gross margin%Must remain below 100%.Labor-rate sourceThe result records whether rates came from the local profile or manual overrides.

Your result will land here.

Enter the added scope costs, labor, and target job gross margin. The result is an internal pretax pricing aid.

Formula methodology

Input contract

What goes into the result

Labor roles, hours, and direct rates
Materials and waste
Subcontractors and equipment
Mobilization, permits, disruption, and reserve
Target job gross margin

Output contract

What comes back

Cost by category
Total direct change cost
Suggested pretax price
Gross profit
Revised contract total
Pricing-method gap

Worked examples

Follow the denominator.

These are hypothetical teaching examples, not market-rate recommendations. Your result uses only the values you enter.

Example 1

$1,600 direct change cost

$1,600 ÷ (1 − 0.40)

$2,666.67 price · $1,066.67 gross profit

Example 2

Material cost rises 10%

Adjusted materials and total direct cost are recalculated first

Target-margin price rises without stacking a second markup

Included in the math

Multiple labor rows
Material waste
Direct allowances and reserve
Margin sensitivity
Internal line-item export

Not modeled unless entered

Tax
Customer-facing legal language
Signatures or statutory notices
A promise that scope is contractually approved

Edge cases & common mistakes

The formula can be right while the cost basis is wrong.

Stacking markup and margin

Do not mark up each line and then silently apply a whole-job margin to the already-marked-up cost.

Forgetting mobilization and disruption

Added scope can create real direct cost outside hands-on labor and purchased material.

Treating this as a legal form

This is an internal costing aid. Contract terms, notices, approvals, and signatures are outside the tool.

Plain-language answers

Frequently asked

Does the suggested price include sales tax?

No. It is a pretax planning estimate. Taxability and rates must be handled separately with user-entered rules.

Can I use profile labor rates?

Yes. Saved local role rates can flow into the builder, and the tool labels whether a rate came from the profile or a manual override.

Continue the pricing chain