Recently, a builder consulted me
about an owner who refused to pay
overhead and profit charges on
change orders and allowance work.
The owner argued that the extra work
was merely an "upgrade" to work that
the builder already expected to do,
and did not warrant payment beyond
additional labor and material charges.
Is there such a thing as an upgrade
that is not subject to the builder's
charges for overhead and profit? The
short answer is "No," but it depends on
what you have agreed to in your contract.
In fixed-price construction agreements,
all additional work or deviations
from the scope of the work should be
written up as change orders and should
carry overhead and profit