[agla]

What I saw and heard about a lot was people going over plans and spec's with a fine tooth comb looking for omission of detail that many would others would assume and account for in their bids.This gave them an advantage as they would bid lower knowing that they could bring these things up when it was time to do those parts of the job.They would point out that it is not in the contract and then write up a change order. In the end, they were far above the bidders that they under cut.

[RHPL]

A friend of mine that is very successful in the industry and does projects form $10,000 to multi million dollars provides a bid price and does T&M for all change orders. His contracts state the mark-up or 'handling fee' that is applied to all materials and consummables (normally 15% - 20% for him).

If this customer is sure there will be lots of additions to the project, why not have a bid price for what is planned and handle changes with T&M.

Your labour rates need to cover off for your overhead and include a portion of your overall profit.

I'm going to start using T&M for all change orders, so if a change to the project is required, the foreman has the custome signoff on a simple little form that just states what the change is and that time and materials will be invoiced upon completion of the change (not the project). It almost becomes an extra progress payment which is much better than adding it on to the final payment when things start to get tight. The sooner the customer knows the costs and the sooner you get paid, the better.