Avoiding construction cost overruns is a project priority second only to timely completion, and avoiding them should be the top priority for any project manager. Budget overruns are the bane of any project, construction or otherwise, and these planning oversights are potentially disastrous and unfortunately common. According to KPMG, less than a third of all projects came within 10% of their initial budget in the past 3 years. Avoiding them is paramount to delivering construction projects to the satisfaction of your clients.

Most Common Cost Overrun Causes

Inaccurate Estimates

Inaccurate estimates are easily avoidable. They are most likely to come from a firm looking to underbid the competition. Overpromising on a budget and having costs substantially exceed the estimate is a sure way to lose clients. While estimate accuracy is important and may make the difference between getting awarded a job and being passed over for it, you protect your business best by slightly overestimating and then delivering the project under budget. This will give project managers budgetary wiggle room should the project run over budget. Finally, if the additional budget is no longer needed upon timely completion, the boost in reputation will bring a firm more work and thus more money in the long run.

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