fixed price change order

Time & Materials vs. Fixed Price Change Orders: When Each Makes Sense and Why It Matters

Change orders can be priced fixed (a lump sum agreed in advance) or as time and materials (actual cost plus markup). Each approach has different risks, different documentation requirements, and different outcomes. The decision about which structure to use on a specific change order affects whether the contractor gets paid fairly and whether the owner gets value. Understanding when each is appropriate and how to execute each well prevents the common disputes that result from poor structure choice.