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Contractors can add a charge for change orders within the contract to help deter owners from making constant changes. Generally, a construction change order markup of 10% of the net direct cost is considered an acceptable and reasonable charge for change orders.
What is the standard markup for a change order?
Ask your CPA for help identifying other types of indirect costs. Many contracts provide for a markup percentage for change orders, such as 10% or 15%, intended to cover overhead, indirect costs and profit.
What is a reasonable change order percentage?
Change order percentages between 8.0 percent and 15.0 percent are usually considered acceptable and reasonable. Profit The contractors profit, as a percentage of the sum of the total direct and indirect costs, should be within a reasonable range.
What is a reasonable change?
reasonable changes means necessary, appropriate and adjustments offered in a manner that does not impose a disproportionate burden, where needed in a particular case, to ensure persons with disabilities enjoy or exercise on an equal basis with others all human rights and fundamental freedoms; Sample 1Sample 2.
What is the markup on a contractor change order?
Markup: This refers to the amount that the contractor adds to costs (both direct and overhead) to arrive at a profitable selling price. You must also factor the markup into change order prices. A common industry standard for markup is 15 percent.
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What is the average percent of change orders in construction?
Average percent change starts at about 4% at the beginning of a project and rises only slightly over the life of the project, finishing at about 4% after the project is complete.
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