Change Order Pricing and Schedule Impact Calculator for ETO Projects
Change orders are where ETO margin is made or lost. This calculator builds a defensible price from the cost build-up a customer's reviewer will expect to see, including the rework and delay effects that quick quotes usually leave out.
Your numbers
Include scrapped labor from work already done that the change makes unusable.
Purchased or fabricated parts that cannot be used.
Project management, supervision, site and rental costs that continue while the schedule slips.
Your results
Pricing aid only. Entitlement to markup, delay cost and contingency depends on the contract terms. Check your contract's change clause and have contracts review disputed items.
Change order price vs schedule extension
Sweeps Schedule extension caused by the change from 0 to 90, holding your other inputs fixed.
Link change requests to live ERP cost data
Optional: see how a private agent could pull rates, BOM impact and commitments into a change order draft.
Optional. The tool and every export work without this. No spam.
How to use the calculator
Enter the added or reworked engineering and shop hours, the added material and any material made obsolete by the change, and subcontract cost. Set your overhead and profit markup and a small contingency. Then enter the number of days the change extends the schedule and the daily cost of keeping the project running. The result separates direct cost, markup, contingency and delay cost so you can show each line to the customer. The sweep chart shows how quickly delay cost can dominate a small scope change.
- Quote hours for the change plus hours scrapped from completed work
- Show delay cost as a separate line, not buried in markup
- Record the assumptions that the price depends on
Cost build-up logic
The structure is the standard cost build-up used in construction and equipment contracts: direct costs, then markup for overhead and profit applied to direct cost, then contingency applied to the running total, and finally time-related costs that depend on duration rather than on work content. Material handling is applied to both new and obsolete material because the purchasing and freight effort is real. Realised margin excludes delay cost because it is largely a recovery of cost, not profit.
Interpreting the price
If your realised margin is well below your normal job margin, the change is probably underpriced or the markup is too thin for the risk. If the delay cost is the largest line, check whether the schedule extension is real and whether the contract allows time-related recovery. Customers often accept direct cost readily and push back on delay claims, so document the critical path logic. Always state a validity period, because material prices and labor availability drift.
Common mistakes
Teams forget the cost of work already done that the change invalidates, which is often the biggest item. They also price the change at the original job's blended rate instead of current cost rates, or they agree a lump sum before the engineering effect is understood. Another frequent error is performing the work on a verbal approval and then finding no written change order exists when the invoice is disputed.
- Do not start work before written authorization when the contract requires it
- Capture the cumulative effect of several small changes
- Keep a link between the price build-up and the ERP change record
Frequently Asked Questions
What markup is normal on a change order?
It depends on the contract and your overhead structure. Many equipment builders apply a combined overhead and profit markup in the low to high teens or higher on direct cost, while some contracts cap it at a fixed percentage. Check the change clause before pricing.
Can I charge for delay caused by a change?
Often yes, if the contract allows time-related costs and the change affects the critical path. You need to show the schedule impact and the daily cost. Delay claims without a schedule analysis are the most commonly rejected line items.
Why include obsolete material?
When a customer-directed change makes purchased or fabricated parts unusable, the cost of that material was caused by the change. Excluding it transfers the loss to your margin, so it belongs in the direct cost build-up.
How is margin shown here calculated?
Realised margin is price minus direct cost and delay cost, divided by price. It reflects markup plus contingency retained. Delay cost is excluded because it is mainly a recovery of continuing project costs rather than profit.
Netray can connect this pricing logic to your ERP so a change request pulls current rates, BOM impact and open commitments automatically. Ask for a walkthrough.
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