Changes on T&M or lump sum: which to ask for, and what each one asks of you
The restaurant exhaust route is drawn, but the condition beneath the dish-pit floor is not known. The superintendent asks which work should be quoted and which should be recorded as it proceeds. The crew needs an answer before collecting the wrong records.
Consider a fixed price where the changed scope and assumptions can be defined, and a permitted time-and-material basis where work must be measured as uncertainty is resolved. Check the contract and agree the basis with authorized representatives before relying on either choice. AACE distinguishes fixed-price work from T&M using specified rates and material-cost treatment. Neither label settles the scope, rate, limit or approval questions on its own.
Agree what the pricing choice includes
- Describe the known and unknown work. Separate defined quantities and routes from conditions needing investigation. Record what may change the price. Do not use a fixed total to conceal a major unknown or use T&M as a substitute for defining the task boundary.
- Check the permitted commercial route. Ask the project manager who can authorize the basis and whether a directive, agreed price or other approval is required. Keep urgent work instructions and the pricing agreement identifiable rather than assuming a site conversation settles both.
- Set the fixed-price assumptions. State inclusions, exclusions, access, dates and the treatment of scope that differs from those assumptions. Provide the supported build-up for review where required. A clear offer is easier to discuss than an unexplained contingency inside one figure.
- Set the T&M record and rate basis. Agree labour categories, material and equipment treatment, permitted additions, ticket review and supporting documents. If a not-to-exceed limit is used, state what it covers, how consumption is tracked and who authorizes a revision before the limit is reached.
- Brief the crew and follow the agreement. Identify the change ID, work boundary, required daily evidence and authorized reviewer. Check cost and limit usage as the work develops. Where uncertainty clears, ask whether a revised agreement is useful; do not silently change the pricing basis mid-task.
Common mistakes
- Agreeing T&M without identifying the applicable rates or reviewer.
- Treating a cap as permission to do any work within its dollar value.
- Collecting only a total price when daily supporting records were agreed.
Checklist
Before briefing the changed work
- Known scope and uncertainty separated.
- Permitted basis and authority confirmed.
- Fixed-price assumptions or T&M rates written.
- Any cap and revision process defined.
- Daily evidence and reviewer identified.
- Cost and cash implications reviewed.
Check your understanding
The task is still within its T&M cap, but the crew is asked to add another area. Can it proceed under the same agreement?
