How do you price a steel change order?

Start from the delta, not the whole job

A change order has three parts: what is added, what is deleted, and what already happened that now has to be redone. Take off each separately. If the original takeoff is saved by sheet and member, this is a short exercise; if it is not, you are reconstructing the baseline while the GC waits.

Credits for deleted steel are not always the full original price. Material already ordered or fabricated may be a sunk cost, and detailing and engineering done on the old design is still spent.

What goes into the price?

• Material for added members, using current quotes, not the original bid price.
• Shop labor, including extra handling for small quantities.
• Detailing and revisions to approved shop drawings.
• Rework of fabricated or shipped steel, including field modification.
• Finish and galvanizing for the added or reworked pieces.
• Freight, including extra trips.
• Erection and field crew time, plus standby if the change stops other work.
• Overhead and margin, as the contract allows.

Small changes carry a higher cost per ton than the original contract because setup, detailing and handling are spread over fewer pounds. Do not use the contract average per ton.

How do you protect yourself?

State the drawing revision the change is based on and list the quantities by size. Keep time and material records for field work. Send the price before doing the work whenever the contract allows, and note what schedule impact you are assuming. Escalation matters too: if steel prices have moved since the base bid, the change is priced at today's rates unless the contract says otherwise. See Steel price escalation clauses.

For a deeper treatment with examples, read Steel change order pricing.

What should the paperwork show?

A clean change order shows the revision or bulletin that triggered it, each added and deleted item with size, count, length and weight, the unit prices used, labor and rework hours, and the total. Quantities from a takeoff export give you most of that. If the change was caused by a drawing error or an RFI, reference it. It is much easier to be paid for a change you can trace to a document.

A worked example

An addendum after award adds four W12x26 beams, 20 ft each, to frame a new roof opening, and deletes two W10x15 beams of 14 ft.

Added: 4 x 20 x 26 = 2,080 lb. Deleted: 2 x 14 x 15 = 420 lb. Net change: +1,660 lb, about 0.83 tons.

That net figure is the starting point, not the price. Add the detailing revision, the connections for four new beams, any rework on already-fabricated framing around the opening, extra erection time, and handling. Small changes cost more per ton than the base contract because setup and administration do not shrink with the tonnage. A shop might quote this at a multiple of its contract rate per ton, and that is reasonable if you can document why.

Who pays for what?

That depends on the contract and on the cause. Changes initiated by the owner or design team are usually compensable. Errors in your own detailing are not. Conditions that were unclear in the drawings may be arguable, which is why recording RFIs and responses during bidding matters. Keep emails and drawings with dates, since a change order is as much about evidence as arithmetic.

If the change is large, ask for a time extension as well as money. Steel has a delivery sequence, and one late change can push out erection and the trades behind it.

How can software help?

If your original takeoff lives in a tool that ties each member to its sheet, you can re-check the sheets named in the change without recounting the whole building. You export the added and deleted items as a short bill of materials and attach it to the change order. That shortens the response time, and a quick, well-documented response is more likely to be approved.