I'm having trouble understanding the correct answer.
The correct answer is said to be B.
Per A201 7.3.8. the commentary states"..the amount of credit is determined by the cost that should have been incurred in executing the change by the contractor without decreasing the contractors overhead and profit"
If understanding this correctly. contractors overhead and profit is 15% and that remains.
Cost difference in material is $5245.00-3265.50= $1979.50.
If the contract sum takes into account the total cost of the work, doesn't it also include the over head and profit of the contractor? So in this case, a change order should be $1979.50(Material cost) + 15%(overhead and profit)= $2276.42? Also, wouldn't the contract amount be reduced the same $2276.42 as a change order changes the contract sum?
Please sign in to leave a comment.