Project Scope-Change Economics Calculator

How the project scope-change economics calculator works

Incremental cost is extra labor hours times loaded delivery cost, plus additional materials, subcontract purchases and delay days times incremental daily overhead. Include only costs caused by this change and avoid allocating the same labor or overhead twice.

Change contribution is proposed change price less incremental cost. Margin divides that contribution by change price and is unavailable at zero price. The target-margin price is incremental cost divided by one minus the target margin, rounded upward to cents.

This economic comparison does not establish contractual entitlement, authorize work, determine a critical path or guarantee collection. Contract terms, approval, notice rules, taxes, indirect impacts and the original project economics remain separate. The government reference illustrates cost segregation for changes, not a rule governing every contract.

Worked example

Sixteen added hours at $50 cost $800. Add $500 materials and two delay days at $100 overhead to reach $1,500 incremental cost. A $2,000 change price leaves $500 contribution and a 25% margin. It also meets the entered 25% target-margin price of $2,000.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Acquisition.gov: segregable costs of contract changes