Inaccurate Forward Pricing of Change Orders

$100,000-$400,000 per change dispute (2-3 pricing disputes per cruise ship build; rework costs $20k-$100k per dispute; delayed billing 2-4 weeks impacts cash flow) • $100,000-$500,000 per change (design changes typically require 2-4 change orders per new vessel; 10-15% of estimates are inaccurate, causing disputes or unrecovered costs) • $100K-$600K per modification; 15-25% underpricing to retain customer relationship; expedited labor costs add 20-30% but aren't fully recovered; customer disputes invoices at final reconciliation

Ad-hoc estimation using past ferry project data (often 2-5 years old); phone calls to regulatory consultants and component suppliers; costs documented in email with no formal version control • Contracts Administrator compiles estimate justification from Production email + regulatory consultant quotes + vendor price lists; manually cross-checks against historical ferry project comps; negotiation via email/phone; no formal documented process • Contracts Administrator receives estimate from Production Control (often backed by email trail, not formal documentation); manually compares against contract pricing schedule and historical comps; negotiates back-and-forth via email; resolution takes 2-4 weeks; documented only in email archive with no version control