Uncovering Hidden Credits in a Consolidated Change Order

Overview

During the construction of a multi-family residential development, the developer received a change order request from the general contractor on behalf of the electrical subcontractor. The request bundled several design bulletins into a single proposed cost of approximately $50,000. While the pricing appeared detailed and the unit rates were reasonable, a deeper review revealed a significant oversight in the quantities used.

The Problem: Failed Eyeball Test

Although the change order included detailed pricing, it failed to incorporate credited scope reductions in the quantities and pricing. The unit rates were acceptable, but the quantities were significantly overstated. An engineer from the design team flagged the discrepancy, noting that reductions in electrical scope, such as switches and outlets, were not being properly accounted for.

Our Solution: Detailed Review, Quantity Verification, and Clear Documentation

We performed an independent quantity takeoff to verify the scope changes. Our analysis confirmed the engineer’s concern: across more than 25 floors, there were consistent reductions in the number of switches and outlets per unit. While these changes seemed minor on a per-unit basis, they added up substantially across the entire building.

Using this data, we engaged the project team and asked a critical question: where were the credits for these reductions being captured? The original change order did not reflect them.

The Result: Fair Resolutions and Cost Savings

Once the scope was updated to include the appropriate credits, the financial picture changed dramatically:

• Original Proposal: +$50,000 Add

• Revised Evaluation: -$110,000 Credit

This resulted in a $160,000 net swing, a major win for the owner and a clear example of the value of detailed scope validation.

Key Takeaway: Small Value Change Orders Can Carry Significant Impact

Even well-documented change orders can conceal significant financial impacts when scope credits are not properly reflected in the quantities. Independent review and data-driven analysis are essential tools for protecting project budgets, especially when multiple changes are bundled into a single request.