The job had been priced as construct-only.

Just before the contract was signed, the builder was asked to accept a Design & Construct contract instead.

I had only recently joined the project team when the owner came to talk to me about it. They knew the superintendent, had worked with them before, and had been reassured that although the contract said D&C, it was really “D&C in name only.”

That phrase bothered me.

Contracts don't generally care what somebody meant in a conversation. They care what you signed.

I suggested going back to the estimate and latest documentation before signing. Had anything changed? And was the builder now accepting responsibility for something that hadn't been included in the price?

The contract was legally reviewed and signed.

For a while, nothing happened.

Then the drawings started telling a different story.

The problem was under the building

At tender, the architectural design showed cottages supported on screw piles.

The design had subsequently changed to slab-on-ground construction. The architectural drawings had been updated, but the civil and hydraulic drawings hadn't been properly coordinated with the change.

Eventually it surfaced in the slab levels and underslab drainage.

Suddenly “D&C in name only” mattered.

The builder had signed a D&C contract. The design coordination problem sat with them.

And the cost wasn't just another set of drawings. It meant additional concrete, civil works, rework, subcontractor downtime, disrupted sequencing, delays and management time.

The real problem wasn't simply that the drawings were wrong.

The builder had accepted a different risk position from the one it had priced.

Go back to what was allowed

Every number in an estimate has something behind it: scope, quantities, drawings, specifications, assumptions, exclusions and risk.

If those things change, the number may no longer mean what you think it means.

That's why, when a cost starts moving, one of the most useful questions isn't simply:

“How far over budget are we?”

It's:

“What happened here?”

Go back to the estimate. Understand what was allowed and compare it with what is now being contracted and built.

You don't need to be an expert in every trade to do that. You need to understand each element well enough to know whether you're still comparing apples with apples.

Because some margin problems don't start when the invoice arrives.

They were already there when the contract was signed.

The ceilings and partitions package was ready for procurement.

The budget said $50,000.

Then the scope was properly reviewed.

Something was very wrong.

The estimator had misread the scope. The $50,000 allowance covered linings to some small sections around door openings, but had missed plasterboard lining to all of the internal walls.

The external cladding had been missed as well.

By the time the actual scope was understood and the package was let, the cost wasn't $50,000.

It was $400,000.

That's a $350,000 problem before the subcontractor has even started work.

This is why procurement isn't just getting quotes

It would be easy to look at the $400,000 subcontract and say the package has blown its budget.

But that doesn't tell you what happened.

The problem wasn't created when the subcontract was let. It was already sitting in the estimate.

Procurement simply exposed it.

This is where a good CA or PM needs to get behind the number. What scope sits behind the budget? What do the current drawings and specifications require? Does the subcontractor's price cover the same thing?

If the numbers don't line up, stop and find out why.

You don't need to be an expert in ceilings and partitions to do that. The same analytical process applies whether you're buying concrete, plumbing, structural steel or mechanical services.

Understand what was allowed. Understand what you're now buying. Then make sure you're comparing apples with apples.

Finding it early matters

Discovering a $350,000 estimating error isn't good news. But discovering it during procurement is considerably better than discovering it after the cost has been committed.

Once the delivery team understands the exposure, they can do something about it. They can look for compliant alternative materials or construction methods that achieve the required specification at a lower cost, negotiate the package, review scope interfaces and look for opportunities to claw back some of the lost margin through savings on other packages yet to be let.

The forecast can also be updated so management understands the likely impact, and the team can investigate whether similar assumptions or omissions exist elsewhere in the estimate.

And that last step matters. If one package contains a significant estimating error, the useful commercial question isn't only:

“How do we deal with this $350,000?”

It's also:

“Where else should we be looking, and where can we recover some of it?”