Construction cost overrun reporting an owner usually sees last
Construction cost overrun reporting an owner gets lags the site by two to four months. The delay is structural, and three added lines remove most of it.
Notes on how a price is built
Short pieces on the mechanisms that move a guaranteed maximum price before anybody signs it. No client names, no case studies, and every figure marked as an example.
Categories
Eight subjects, read from the owner’s side
Each category collects the pieces that answer one kind of question. The count shows what is published, not what is planned.
GMP fundamentals
What the ceiling covers, what it leaves open, and which documents answer that.
17pieces publishedContingency and allowances
Two funds and a set of placeholders. Who controls each one, and what empties them.
13pieces publishedChange orders and pricing
How a change gets priced, who pays for the cause, and which terms govern both.
12pieces publishedClaims, notices and reporting
Notice deadlines, delay claims, and what the monthly report leaves out.
11pieces publishedSchedule and delay
Whether the date is real, where the float sits, and who owns it when it moves.
13pieces publishedProcurement and buyout
What is bought, what is still an estimate, and the dates behind the long lead items.
11pieces publishedConstructability, scope and design
The gaps between trade packages, and drawings that disagree with the specification.
13pieces publishedContracts and delivery methods
CM at risk, the standard forms, and the clauses that decide who carries which risk.
10pieces published
Latest
Everything published so far
Construction loan approval conditions worth attaching to a GMP
Construction loan approval conditions cost the borrower a negotiation and cost the lender nothing. Seven of them close most of the exposure before closing.
Lender construction contingency requirements, and what they should test
Lender construction contingency requirements usually set a percentage. That is the one property of a contingency fund which predicts nothing at all.
Construction loan GMP due diligence before the first drawdown
Construction loan GMP due diligence turns on four documents. Read them and you know whether you are lending against a price or against a careful estimate.
A construction cost range forecast an investor should ask for
A construction cost range forecast an investor can rely on is built from named exposures, not from a percentage applied to a total that nobody can defend.
The construction sponsor report an investor gets, and what it leaves out
The construction sponsor report an investor gets is accurate and incomplete. Four figures are missing from almost every one, and each is easy to request.
Underwriting construction risk an investor cannot see from the model
Underwriting construction risk an investor never manages directly is a documents exercise. The model cannot show you what the contract quietly left open.
A construction budget review an investor can do in an afternoon
A construction budget review an investor can do in an afternoon: six lines that tell you whether the number is settled or still an estimate in a suit.
An owners representative risk disagreement with a client, put in writing
An owners representative risk disagreement with a client is a record problem before it is a judgment problem. Write the exposure down, then let them pick.
The GMP review timeline an owner can fit before signature
The GMP review timeline an owner can fit before signature is shorter than most people assume, because the reading runs alongside legal and lender work.
Presenting construction cost to a board, and making the number hold
Presenting construction cost to a board goes wrong in the same three ways. A range, a named cause and a written source fix all three before the meeting.
The independent GMP review an owners representative should ask for
The independent GMP review an owners representative should ask for: what it covers, what it produces, and how it holds up when the client reads it.
Signing a GMP under time pressure, and what it costs later
Signing a GMP under time pressure moves the reading to after the fact, where every finding is a change order instead of a negotiating position.
Pro forma contingency vs construction contingency, told apart
Pro forma contingency vs construction contingency: two funds, two owners and two sets of rules. Adding them together is how a thin position looks safe.
Construction loan lender questions a developer cannot answer yet
Construction loan lender questions a developer cannot answer yet, and the four documents that turn each one into a number before the bank asks it.
A construction overrun, and the equity waterfall it runs into
A construction overrun and the equity waterfall underneath it decide who absorbs the first dollar above the ceiling, and it is rarely the lender.
Self storage construction cost risk, on a repeatable building and a difficult site
Self storage construction cost risk is not in the building, which repeats. It is in the site, which never does, and in the entitlements attached to it.
Tilt up construction scope gaps, and where the shell packages stop
Tilt up construction scope gaps appear at the panel joints, the embeds and the perimeter, where three packages meet and each assumes another closes it.
Warehouse slab tolerance specification, and the racking it has to serve
A warehouse slab tolerance specification is a number that decides whether the racking works. Getting it wrong is discovered after the concrete has cured.
Industrial construction GMP schedule risk, on a job with no room to be wrong
Industrial construction GMP schedule risk comes from compression. A twelve month job has no float, so every problem lands on the completion date.
Senior living construction licensing delay, and the date after the date
A senior living construction licensing delay costs more than the work that caused it, because a building that cannot be licensed cannot take residents.
Phased construction occupied healthcare facility work, and the swing space it needs
Phased construction occupied healthcare facility work depends on swing space and decant dates, and both of those belong to the owner, not the builder.
ICRA construction cost impact, and what infection control does to a schedule
ICRA construction cost impact is mostly schedule rather than material. Containment and restricted access change how fast the work can be done at all.
Medical equipment construction coordination, and the decisions that arrive late
Medical equipment construction coordination fails on timing rather than on drawing. The room is built before the machine that defines it has been selected.
Hotel opening date construction delay, and the cost of missing it by a month
A hotel opening date construction delay costs more than extended general conditions, because an opening is a season, a booking curve and a staffed payroll.
Hotel operator requirements construction receives after the price is fixed
Hotel operator requirements construction receives after signature are normal and foreseeable, which is why they belong in the price as a stated basis.
Hotel brand standard change construction meets halfway through a job
A hotel brand standard change construction absorbs is not a design change. It is an obligation to a third party who is not in your contract at all.
Hotel FFE procurement owner risk, and who carries the operating supplies
Hotel FFE procurement owner risk sits in three budgets that never meet: the construction contract, the operator specification and the pre opening account.
Phased handover data center construction promises, and what it depends on
Phased handover data center construction plans rest on early energization, and energization rests on a utility nobody in the contract controls.
Data center capacity change order pricing, after the number is fixed
A data center capacity change order is priced with no competition and a factory queue in front of it. The same scope costs far more than it would have.
Owner furnished equipment construction risk, and the gap it creates
Owner furnished equipment construction risk is not about the equipment. It is the five items around it that no trade package claims by name.
Data center GMP contract risk, and pricing a design that is still moving
Data center GMP contract risk comes from fixing a price on a building whose purpose is defined by equipment the tenant has not finished choosing yet.
Amenity scope creep multifamily projects produce, and the late addition problem
Amenity scope creep multifamily owners create is late, small and repeated, which is exactly the shape of change the contract prices worst for them.
Unit mix change construction cost, and why it never scales the way it reads
A unit mix change construction cost never scales the way the drawing suggests. Moving one wall moves plumbing, electrical and the structure below.
Podium construction cost risk, and what sits in the transfer level
Podium construction cost risk sits at one level, where a residential grid lands on a parking grid and every discipline changes direction at once.
Multifamily GMP cost risk, and the three lines that move most
Multifamily GMP cost risk is concentrated. Three lines account for most of the movement on almost every job, and all three are readable before signing.
Commercial fit out schedule risk, and what the leasing date does to it
Commercial fit out schedule risk starts the day a lease is signed. A date agreed in a leasing meeting becomes an obligation nobody has tested.
Core and shell scope gaps, and the handover line nobody drew
Core and shell scope gaps open at the line between base building and tenant work, because that line is described twice and drawn properly by neither.
Tenant improvement allowance an owner carries, and where the base building stops
A tenant improvement allowance an owner grants is a number in a lease and a scope in a contract. The gap between those two documents is owner cost.
Mixed use construction GMP risk, and the two buildings inside one price
Mixed use construction GMP risk comes from pricing two buildings as one. The retail base and the tower above it behave differently in every column.
Design build vs CM at risk, read from the owner side
Design build vs CM at risk is a choice about who holds the design. What each method gives an owner, what it takes away, and when each one fits.
Construction lien waivers, and the tier nobody checks
Construction lien waivers protect an owner from paying twice. The exposure is not the general contractor, it is the tiers below that nobody asks about.
Construction retainage, and what it is actually securing
Construction retainage is the owner’s main security during a job. What it protects, when it stops being enough, and why the release schedule matters more.
Construction insurance owner requirements, and who is named on what
Construction insurance owner requirements are a list of policies, limits and named parties, and the gaps between them are where an uninsured loss sits.
A construction payment application, and the six lines to read
A construction payment application is approved monthly on a percentage nobody tests. Six checks that take twenty minutes and find most of what matters.
The monthly construction report an owner should be demanding
A monthly construction report usually describes progress. The six numbers that describe exposure instead, and why the standard format never contains them.
Shared savings clause construction contracts use, and what shrinks the pool
A shared savings clause construction contracts carry looks generous and pays little, because four mechanisms reduce the pool before anybody divides it.
Construction claim documentation an owner already has, and never files
Construction claim documentation is usually assembled after a dispute starts, from records kept for other reasons. What to keep from day one, and why.
A differing site conditions claim, and who carries the ground
A differing site conditions claim turns on what the contract said the ground was. Type one and type two, the notice clock, and the reports that decide it.
CM at risk explained for owners, and what you are actually buying
CM at risk explained for owners: what the construction manager carries, what stays with you, and the three clauses that decide the difference on your job.
A construction disruption claim, and the hours nobody can see
A construction disruption claim is about lost hours rather than lost days. How loss of productivity is measured, and the four questions that narrow one.
A construction acceleration claim, directed and constructive
A construction acceleration claim can arrive with nobody ordering acceleration. How it is built from a refused extension, and what holding the date costs.
Existing conditions risk, and the survey that was never done
Existing conditions risk on a renovation is carried by whoever the contract says. What a survey establishes, and what an as built drawing does not.
MEP coordination, and the ceiling space everyone assumed was empty
MEP coordination decides whether the services fit above the ceiling. When it happens after the price is fixed, the fix is always paid by somebody.
Construction commissioning scope, and who is paying for it
Construction commissioning proves the building works. The scope sits across three contracts and the gaps between them are found at the worst moment.
Substantial completion, and the punch list that follows it
Substantial completion stops liquidated damages and releases retainage. What the definition should require, and why the punch list is a separate question.
Construction milestone dates, and whether any of them bite
Construction milestone dates in a contract look like control. Most carry no consequence, which means they are targets rather than obligations.
Drawings vs specification conflict in construction, and who decides
A drawings vs specification conflict in construction is priced by whoever saw it first. The order of precedence clause decides the argument that follows.
Clash detection vs constructability review, and what each one finds
Clash detection vs constructability review is a question of what gets tested. One compares geometry. The other reads scope descriptions against drawings.
Scope gaps between trade packages, and where they always appear
Scope gaps between trade packages appear in the same six places on almost every job. Each one is a change order waiting for somebody to notice it first.
A construction schedule update review an owner can do monthly
A construction schedule update review takes an hour and answers one question: what moved. Five checks that find the change before the completion date does.
Weather days in a construction contract, and the baseline nobody sets
Weather days are the most predictable delay claim on any project and the least well drafted. What a baseline does, and why unusual needs a definition.
Missing procurement packages in a GMP, counted at signature
Missing procurement packages in a GMP are the part of the price that has not been tested yet, and counting them takes one document and twenty minutes.
Concurrent delay, and why both parties think they are right
Concurrent delay is two delays running at once, one each side. What the owner gets, what the contractor gets, and why the analysis method decides it.
Liquidated damages a construction owner can actually rely on
Liquidated damages a construction owner writes into a contract are a cap as often as a remedy, and the number is worth testing before it is agreed on.
The GMP buyout process, and what the buyout gap tells you
The GMP buyout process turns estimates into subcontracts one package at a time, and the gap between the two is the clearest signal a project gives.
Trade contractor default on a GMP, and what reaches the owner
Trade contractor default is contractor risk, until the replacement costs more than the bond pays. What reaches the owner, and what to check before you sign.
Long lead items and the construction schedule date behind the date
Long lead items on a construction schedule carry a release date months before the install date. Miss it and the completion date moves on its own.
Who owns float on a construction schedule, and what the contract says
Who owns float on a construction schedule is decided by one clause and by how the schedule was built. Most owners find out the answer during a delay claim.
How to review a construction schedule when the date looks too good
How to review a construction schedule as an owner: four tests that show whether the completion date is a plan with slack or a hope with a number on it.
A construction substitution request, and who benefits from it
A construction substitution request after award changes the product and rarely changes the price. Three questions that decide whether to accept one.
Construction delay claim owner response, and the three questions to ask first
A construction delay claim owner response starts with three questions about the schedule, not with a view about whether the delay was the contractor fault.
A sole source specification, and the competition it quietly removes
A sole source specification names one manufacturer and removes the competition behind that package. When it is justified, and what it costs when it is not.
Construction bid leveling an owner can check in an afternoon
Construction bid leveling decides which trade price is really lowest. Six checks an owner can run on a leveling sheet without pricing any of the work.
Change order markup a construction contract should fix before signature
Change order markup in a construction contract is competitive for a week. After signature it governs the price of every change for the rest of the job.
Construction buyout savings, and who actually keeps them
Construction buyout savings are real money created early in a job. Four clauses decide where they go, and most owners read none of them before signing.
Construction tariff risk, and the packages that carry it
Construction tariff risk is a step change rather than a trend, which is why no escalation index catches it. Which packages carry it, and how to bound it.
Construction contract notice deadline an owner should know by heart
A construction contract notice deadline an owner misses turns a valid position into nothing at all, and the clock starts before anybody has a number.
Owner scope change vs design gap, told apart in practice
Owner scope change vs design gap is the distinction that decides who funds a change, and it is settled by one question asked about the original documents.
Change order cause: the one word that decides who pays
Change order cause classification decides who carries the money. One word on a form moves cost between the owner, the contractor and the contingency fund.
A construction escalation clause, and the risk it moves back
A construction escalation clause looks like a small qualification on a price. It is an open exposure with no ceiling unless one is agreed before signature.
An escalation allowance, and the risk it does not actually cover
An escalation allowance is a number in the budget. Escalation risk is an open item in the contract. Owners carrying the first often still carry the second.
Unused construction contingency, and where it goes at the end
Unused construction contingency rarely comes back in full. Three mechanisms consume it in the final months, and all three are visible from month eighteen.
Allowance reconciliation, and the money that never comes back
Allowance reconciliation should return unspent money to the owner. Four mechanisms stop it, and all four are settled by contract language before signature.
Construction allowance management an owner should insist on
Construction allowance management an owner controls is three dates and one document. Without them an allowance behaves like a floor, and floors move up.
Design contingency vs construction contingency, and the handover
Design contingency covers what the drawings have not resolved yet. It should shrink as the design completes, and on most projects it quietly does not.
Contingency drawdown rules, and the four that are missing
Contingency drawdown rules decide what the money buys and who approves it. Most contracts answer one of the four questions and leave the other three open.
A credit change order, and why so few of them arrive
A credit change order returns money when scope is removed. They are rarer than removals, and the reason is usually the way the credit is calculated.
How much contingency on a GMP is enough, measured against demand
How much contingency on a GMP is enough is not a percentage question. Size the fund against the demand already visible on the day the price is signed.
Contractor contingency vs owner contingency, and why they are never added together
Contractor contingency vs owner contingency: two funds, two rule sets, two people with the pen. Added together they protect less than the total suggests.
Claim vs change order, and the moment one becomes the other
Claim vs change order is not a question of size but of agreement, and the moment one becomes the other decides what an owner is still able to negotiate.
A time and material change order, and the ceiling nobody sets
A time and material change order has no price until the work is finished. Four controls that bound one, and when it is the right instrument anyway.
Construction labor rates, and what the burden actually contains
Construction labor rates are base wage plus burden, and the burden is where the arguments are. What belongs in it, and what to settle before signature.
General conditions in a GMP, and what they quietly include
General conditions are the cost of running the job rather than building it. Which items belong there, which belong in the fee, and why the line moves.
Open book construction accounting, and the audit right behind it
Open book construction accounting gives an owner sight of actual cost. Without an audit right and a definition of records, it gives sight of a summary.
Fifteen questions to ask before signing a GMP
The questions to ask before signing a GMP, grouped by what each one protects: the price, the schedule, the scope, and the way change gets priced.
Cost of the work, and the definition that decides the savings
Cost of the work is the definition that decides what an owner reimburses and what the fee covers. It is several pages long and it settles the savings pool.
The GMP amendment, and the eight documents it attaches
A GMP amendment is a short document attaching longer ones. The eight exhibits decide what the guarantee covers, and the amendment itself decides little.
GMP vs lump sum vs cost plus, read from the owner side of the table
GMP vs lump sum vs cost plus is a question about where the risk sits and what you get to see. Each form trades visibility against certainty differently.
What does a guaranteed maximum price guarantee?
What does a guaranteed maximum price guarantee? A ceiling over one scope, defined on one date, and four mechanisms that move cost without touching it.
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