Commercial roofing projects often require changes after construction begins. These changes may occur because of hidden conditions, owner requests, design revisions, or unexpected repairs.

When additional work is required, the contractor and property owner must agree on how that work will be priced. Two common methods are:

• Time-and-materials (T&M) change orders

• Lump-sum change orders

Understanding the difference between these two approaches helps commercial property owners choose the most appropriate pricing method, control costs, and avoid disputes during roofing projects.

What Is a Change Order?

A change order is a written modification to an existing roofing contract that changes the:

• Scope of work

• Contract price

• Project schedule

• Materials

• Installation requirements

Examples of roofing change orders include:

• Replacing unexpected damaged roof decking

• Adding insulation repairs

• Installing additional flashing

• Repairing hidden water damage

• Changing roofing materials

The pricing method used for the change order determines how costs are calculated.

What Is a Lump-Sum Change Order?

A lump-sum change order is a fixed price agreement where the contractor provides one total cost for completing the additional work.

The owner agrees to pay the stated amount regardless of the contractor’s actual labor hours or material costs, assuming the scope does not change.

Example of a Lump-Sum Roofing Change Order

A contractor discovers damaged roof decking and submits:

Replace 3,000 square feet of damaged metal decking: $45,000

The price includes:

• Materials

• Labor

• Equipment

• Disposal

• Contractor overhead and profit

The owner pays the agreed $45,000 if the work is completed according to the approved scope.

Advantages of Lump-Sum Change Orders

Cost Predictability

The owner knows the exact cost before work begins.

Easier Budget Management

Financial planning is simpler because the final price is established upfront.

Reduced Administrative Work

The owner does not need to review daily labor records or material invoices.

Encourages Efficiency

The contractor manages productivity and cost control.

Risks of Lump-Sum Change Orders

Contractor May Add Risk Premium

Because the contractor assumes cost risk, the price may include additional contingency.

Scope Must Be Clearly Defined

If the scope is unclear, disputes may occur over what is included.

Hidden Conditions Can Create Problems

If conditions change significantly, another change order may be required.

What Is a Time-and-Materials Change Order?

A time-and-materials change order calculates the final cost based on the actual labor, materials, equipment, and approved markups used to complete the work.

The owner pays based on documented costs.

Example of a Time-and-Materials Roofing Change Order

A contractor repairs unexpected roof deck damage.

The final cost includes:

• 80 labor hours × approved labor rate

• Actual decking materials purchased

• Equipment charges

• Disposal costs

• Approved overhead and profit

The final price is determined after the work is completed.

Advantages of Time-and-Materials Change Orders

Useful for Unknown Conditions

T&M pricing works well when the full extent of work cannot be determined.

Examples:

• Hidden deck damage

• Leak investigations

• Structural repairs

Fair When Scope Is Uncertain

The owner pays for actual work performed.

Faster Decision Making

Work can begin without waiting for a complete fixed-price estimate.

Risks of Time-and-Materials Change Orders

Final Cost Is Uncertain

The owner does not know the final amount until work is complete.

Requires Strong Documentation

Contractors must provide:

• Labor records

• Material invoices

• Equipment records

• Daily reports

Requires Owner Oversight

Owners may need to monitor progress closely.

Key Differences Between T&M and Lump-Sum Change Orders

Lump-Sum Change Order	Time-and-Materials Change Order
Fixed total price	Cost based on actual expenses
Predictable cost	Final cost unknown initially
Contractor assumes more risk	Owner assumes more cost risk
Requires clear scope	Useful for uncertain scope
Less administrative review	Requires detailed records
Faster budget approval	Better for unknown conditions

When Should a Roofing Project Use Lump-Sum Pricing?

Lump-sum pricing is usually best when:

• The scope is clearly defined

• Quantities are known

• Materials are identified

• Conditions are predictable

Examples:

• Adding a known amount of flashing

• Installing additional insulation in a defined area

• Replacing a specific roof section

When Should a Roofing Project Use Time-and-Materials Pricing?

T&M pricing is often appropriate when:

• The condition cannot be fully evaluated beforehand

• The extent of repairs is unknown

• Immediate work is required

Examples:

• Emergency leak repairs

• Hidden structural damage

• Unexpected deck deterioration

How Should Time-and-Materials Change Orders Be Controlled?

To prevent disputes, contracts should define:

Labor Rates

Specify:

• Worker classifications

• Hourly rates

• Overtime rates

Material Markups

Define allowable percentages for:

• Materials

• Equipment

• Subcontractors

Documentation Requirements

Require:

• Daily reports

• Time sheets

• Receipts

• Photos

• Approval records

Spending Limits

Some owners establish:

• Not-to-exceed amounts

• Required approval thresholds

Example:

“Contractor shall not exceed $25,000 without written owner approval.”

Can a Change Order Combine Both Methods?

Yes.

Some roofing changes use a hybrid approach.

Example:

• Known work priced lump sum

• Unknown additional repairs priced time-and-materials

This approach provides flexibility while maintaining cost control.

Common Mistakes to Avoid

Using T&M Without Controls

Unlimited T&M work can create unexpected costs.

Using Lump Sum for Unknown Conditions

A fixed price may encourage contractors to include excessive contingency.

Approving Verbal Changes

All changes should be documented in writing.

Ignoring Unit Prices

Existing contract unit prices should be used when available.

Frequently Asked Question

What is the difference between a time-and-materials and lump-sum change order?

A lump-sum change order provides a fixed price for a clearly defined scope of additional roofing work, while a time-and-materials change order charges the owner based on actual labor, material, equipment, and approved costs incurred. Lump-sum pricing provides better cost certainty, while time-and-materials pricing is often better for unexpected conditions where the full scope cannot be determined in advance.

For commercial roofing projects, choosing the correct change order pricing method helps balance cost control, transparency, and flexibility while reducing the risk of disputes between property owners and contractors.

Related Questions

• How do I handle change orders during a commercial roofing project?
• What documentation should accompany every change order request?
• Are verbal change orders enforceable in Florida?
• How do you price unforeseen deck replacement fairly?
• What allowances are typical for deck replacement in a bid?
• How do you audit roofing invoices for accuracy and duplication?
• What is the difference between a prescriptive and a performance specification?

Commercial Roof Replacement / Re-Roofing