Change-order labor burden audit: check overlapping charges

Document the rate's included components

Obtain the agreement's labor-rate schedule, relevant amendments and supporting breakdown where the review rights permit it. Record the worker classification, rate effective date, unit and included components. Distinguish base wages, employer costs, benefits, insurance, supervision, small tools and commercial markup rather than labeling every addition “burden.”

Do not assume an actual payroll rate controls a negotiated change-order schedule. Equally, do not assume a scheduled rate proves an actual-cost reimbursement. The contract's pricing method decides the appropriate test. Put that method beside each row so a reviewer can reproduce the calculation without guessing what a column includes.

Reconcile hours before disputing the rate

Link hours to the changed work, date, location and responsible field record. Check whether the same hours were billed to base scope, another change or a general-conditions line. Review corrections and transfers while preserving the original time entry.

Separate straight-time hours, overtime hours and the premium basis. A payroll entry can establish that time was paid without proving all of it is chargeable to this change. The project reviewer determines attribution and the commercial reviewer confirms treatment. Wage-compliance review remains a separate obligation and should not be inferred from acceptance of the change price.

Worked example: a loaded rate plus repeated burden

Assume a fictional contract sets an $80 hourly change rate that already includes a $20 burden component. The contractor submits 100 supported hours at $80, then adds 25% burden to the $8,000 subtotal. That produces $10,000 before any other charges.

Under the example's inclusive-rate definition, the reviewed labor amount is $8,000 and the proposed repeated-burden adjustment is $2,000. The rate and terms are invented. If the agreement instead defines $80 as an unloaded base with a permitted 25% addition, the $10,000 may be correct. This is why the rate definition must precede the arithmetic.

Test premium, supervision and markup separately

Check whether overtime is authorized and whether the agreement pays the full loaded rate, only a premium increment or another negotiated basis. Avoid applying a generic multiplier to every component. Record the hours and rate treatment that produce the proposed difference.

Then review separate supervision, tools and overhead entries for overlap with the labor schedule or another fee. A named supervisor may perform real work while the agreement includes that cost elsewhere. Ask for a contractual interpretation rather than arguing from the job title alone. Apply markup only after establishing the eligible labor base and sequence.

Use a repeatable review packet without exposing unnecessary payroll data

Limit the packet to the information required for the authorized review. Use redacted examples for initial vendor discussions and approved access for any detailed payroll records. The output should show source hours, rate definition, calculation, contractor explanation and reviewer decision.

Buildalytic's published scope supports document collection and follow-up. Ask to demonstrate the missing-record handoff, then separately define any labor-pricing calculation or payroll-to-change integration. Test one clean inclusive-rate item alongside a true overlap and an ambiguous case. The benefit is a validated decision and reduced reconstruction work, not automatic acceptance of an AI price judgment.

Sources: Buildalytic: current custom-workflow scope