Try using a JC Extra to isolate the costs. Then crest a new contract item that is linked to the Extra. Set the Billing Type on the new Contract Item to T&M. Assign required markup and rate tables. 

JC Extras will definately help with the tracking.  We use these a lot. Just note that changing the billing type to T&M will create 2 different invoices for the contract. We have this issue as well, and unfortunately there seems to be no clear solution to a hybrid client invoice.

Hi KBowe,

You can send costs to billing for lump sum or progress bill contract items. The setup is the same as the setup for a Cost based contract, with the exception of the Billing type on the contract item. When you Generate WIP, the entries are generated in the History.blw file. You can run cost-based billing reports and inquires such as the WIP Reconciliation report on the history file to see the entries.

That is good information.  Thank you.

Ah, that might work.  We have to get the T&M billings approved and they don't always convert to Change Order rifght away, until they are completed.  So if there were a sepearte billing that might be better.  Now, how do I get that item onto the AIA billing as an Owner Change Order once they are  issued and incorporated into the contract amount?    As you can see I've never used the Cost Plus billing module or WIP billings.  LOL. 

Thank you!