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Why do construction projects go over budget?

On Behalf of | Jun 18, 2020 | Construction Litigation

You take on a construction project, confident in your quote. As you get into it, though, you start to fear that it’s realistically going to go over the budget. Why does this happen?

One reason is just that you can uncover issues you did not anticipate. Maybe you thought that the slab had already been poured and you were just hired to build on top of it. When you arrived at the lot, they hadn’t even excavated to slope the land properly, much less poured the slab. Your company can do all of that, but it’s a big expense.

You may also run into issues with your own vendors or subcontractors. Maybe a vendor increased their prices or a subcontractor made mistakes that had to be fixed. Every little thing adds up, and it’s frustrating when this is out of your control.

Environmental issues and quality issues also factor in, especially for renovation jobs. You quoted the price thinking the building was airtight and just needed to be gutted and rebuilt inside. Then a storm hit, and you clearly had water coming in around the slab. Now you have to fix that to get it up to code and protect your interior work. It may be a massive expense, and you may also have the expense of fixing the damage done to the work you already completed.

These are just a few examples, but they show how you can’t always control what happens on the job and how expensive things can get. Unfortunately, going over the budget may lead to a dispute with the property owner. You must know what options you have to protect yourself and your company.