Most construction losses are not mispriced. They are unpriced.

Variations are where it goes

A client visits the site and asks for something moved. The site engineer agrees, because refusing is awkward and the change is small. It is done. Nobody prices it, nobody records it, and at final billing the contractor raises it from memory.

The client remembers a conversation differently, or remembers it as included. The contractor has no contemporaneous record and a relationship to protect, and concedes. Repeat that eight times across a project and the margin is gone, without a single line item having been estimated wrongly.

The unglamorous fix

Record the variation when it is requested. Price it. Get agreement before the work happens, in writing, even if writing means a message from the site.

A two-line note made at the time is worth more than a well-argued case made three months later, because at the moment of the request the client is asking for something and is disposed to agree that it costs money. Three months on, they are looking at a bill.

Track material issued, not purchased

Material purchased against a site and material issued to that site diverge, sometimes badly. Steel bought for one site and used on another is extremely common and almost never recorded, which means both sites are costed wrongly and neither is obviously so.

Do this only for high-value material. Attempting to track every item on a site produces no control at all, because the records will not be kept.

Read cost against completion, not against time

Sixty percent of the budget spent is meaningless on its own. Sixty percent spent against forty percent complete is a problem that is still six weeks away from being unfixable.

The completion figure is a judgement rather than a measurement, and it is worth having someone other than the site engineer make it.