Cost & Change Order Management

We have performed reviews of project accounting records on behalf of owners and lenders to provide them with an analysis of the costs being presented.

Are you aware that change order negotiations are broken into two parts — entitlement and valuation? Entitlement is a review of the contract documents to see if they support a request for change order; i.e. is the contractor entitled to request a change order from the owner based upon what the documents say or don't say, and custom and practice. Valuation is an analysis of the cost basis for the request. Assuming entitlement, we analyze the quantities of the various materials being submitted, the production rates being applied for labor, and the hourly cost being requested for the labor to arrive at a figure that is fair and reasonable for all.