How to Burn the Budget

Let’s assume at the start of the project we know the budget is going to be exceeded. We know the design is incomplete, the cost planner was not in touch with reality, the program was prepared by a Primavera zealot and the project team are as motivated as a retiring politician. So the premise is that the budget will be blown, heads will roll and the project manager will develop a persecution complex.

How do we prevent it? By going back to basics and following a few simple rules:

  1. Don’t manage the design team – control them, make them earn every cent and get them to deliver what they are paid to deliver and by the date it is due
  2. Let 80% of the trade packages within 20% of the contract period.
  3. Assign the best people to the project team and pay them what they are worth.
  4. Have minimal internal reviews. Every time there is a new review or set of eyes someone feels they have to add to the debate.
  5. Make sure the program is prepared by someone who actually knows what to build, pin it up on the site office wall and status it daily.
  6. Ban spreadsheets for cost reporting
  7. Treat subcontractors as equals not servants
  8. Listen to experienced, practical site managers/foremen
  9. Keep hard copies of every email, site instruction, time sheet, order, site instruction and delivery docket if they back up a variation or EOT
  10. Open every meeting with a “safety share” and encourage all to contribute

Ok it is not rocket science, but we are not building space stations. Before we get carried away with BIM, CPA, benchmarking, discounted cash flows, IRRs, pivot tables, delivery strategies etc etc, consider delivering what we set out to, by the time allowed, to the required quality and with no harm to anyone.



Published by

Gerry Keating

Construction Professional

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