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
