The change clause
How a change is priced, who decides that something is a change, and what notice each side gets. Whether a change can be refused is for your counsel.
Home Services Cost and Change Exposure Assessment
A construction change exposure assessment, before the first change arrives
We show you where the money will leak after signature. The rules that price every change are in the contract today, and they are the cheapest thing in it to negotiate.
The question it answers
Where will the money leak?
Why it happens
Why a construction change exposure assessment happens before signature
After signature every change is priced without competition, under terms that were agreed when nobody was looking at them.
Assumed lines look bought
A schedule of values does not show which numbers are bought and which rest on an assumption. The assumed ones are where most overruns start.
Markup compounds by tier
A trade markup, a general contractor markup, general conditions and fee applied in sequence can turn ten thousand dollars of work into a much larger change.
Some costs are counted twice
Items in general conditions the fee already covers, and supervision in both labor rates and site staff, are paid again on every change for two years.
What it covers
The price you sign is the opening balance, not the final one
What decides the final number is the machinery that moves it: the change clause, the unit rates, the markups, the escalation language and the triggers that let all of them run.
We read that machinery before you sign, so that the terms governing the next eighteen months are terms you chose rather than terms you inherited from a template.
None of this is hidden. It is simply spread across four documents, written for a reader who already knows what it means, and usually reviewed by somebody looking at a different question.
What you send us
The draft contract
The general conditions
The unit rate schedule
The markup tiers
The schedule of values
The general requirements breakdown
Insurance and bond documents
Send what you have. A document that does not exist yet is itself a finding, and we will say so rather than wait for it.
What we read
Six things we open first
The order matters. These six carry most of the exposure on most projects, so they come before anything else in the set.
Unit rates and markups
Rates tested against the work they will actually be applied to, and markups tested against every tier below them. Percentages compound quietly.
Escalation
Who carries escalation, which index it is claimed on, what the threshold is, and whether it also runs back to you when prices fall.
Shared savings
What counts as a saving, when it is measured, and what has to be true at closeout before any of it comes back to you.
General conditions
What sits in the fixed staff cost, how it is drawn down month by month, and what happens to that cost if the job runs long.
Closeout
Retainage, the closeout mechanism and the conditions for the last payment. The end of the job is written at the beginning of it.
How we read it
The method, and its limits
What a review is worth depends as much on what it refuses to do as on what it covers.
What we do
Read the commercial machinery as one set, because the clauses act on each other. A fair change clause and an unfair markup tier are not fair together.
What we do not do
We do not draft your contract and we do not give legal advice. We say what a clause is likely to cost on this job. Your counsel says what it means.
What decides the order
Probability multiplied by size. A term that will certainly be used ten times outranks a term that might be used once for more money on this job.
One line from a register
What a finding looks like
A markup tier that applies the full contractor percentage to self performed work as well as to subcontracted work. On a job with forty percent self performance, that is the same margin charged twice against the same scope, every month, for the life of the contract.
What the finding is worth
$300k to $500k
Example only. Figures on this site illustrate the format of a deliverable. They are not taken from a client project and they are not a quotation.
What lands on your desk
01
02
03
Documents, not opinions
Every finding carries the money behind it and points to the page of the set it came from. One call to walk it through, before your signing date.
Change Exposure Register
The triggers most likely to move this price on this project, ranked by what each one is worth, with the clause reference beside it.
Rate and Markup Review
Every rate and markup, with the ones we would reopen marked and the reason written out.
Owner Memo
The contract language we would change before signature, drafted ready for your counsel to review and send.
Before you commission it
Questions owners ask
Run it before the amendment is executed. Every finding here is about language, and language is free to change before signature and expensive to change afterwards.
Is this legal advice?
No, and we will not pretend otherwise. We read commercial terms for what they are likely to cost. Interpretation, enforceability and drafting belong to your attorney.
Can you negotiate for us?
No. We write the memo, you or your counsel take it into the room. We are not a party to your contract and we do not want to be.
Does this replace an audit?
No. An audit checks what has already been paid. This checks the rules that will decide what gets paid, which is a job that has to happen first.
How long does a change exposure assessment take?
Five to ten working days. The general conditions breakdown is usually what slows it down, because it is the document nobody has ready.
What if the terms are fair?
Then the memo says so and names the two or three clauses worth watching anyway. Fair terms still have triggers in them.
What you end up with
What you negotiate with
Contract language and ranges, not a general warning about change orders.
A change exposure register
Ranked by likely value, with the trigger written against each item so you know what to watch for after signature.
Allowance and contingency
Best case and likely case for each allowance, and whether the contingency rules let you see what the reserve is spent on.
Contract language to use
The sentences on markup, rates, credits and reporting that change what every future change order on the project costs.
| Fee | Fixed, quoted against a named document set listed in the engagement. Not hourly. |
|---|---|
| Payment | Fifty percent on engagement, fifty percent before the final deliverable is released. |
| The clock | Delivery starts when the complete document set arrives, not when the engagement is signed. |
| Included | One kickoff call and one readout call. |
| Turnaround | Two to three weeks from the complete document set. |
Read the machinery before you sign, not after it starts running
How this one is bought
One
See the packages
Take this module on its own, or take all four as a single review with one consolidated owner memo.
The other modules
Same set of documents, read from a different side
If you are not sure which module answers your question, send the documents and we will say which one we would run first.