RIGHT OF WAY DELAY CONSTRUCTIVE CHANGE: CHANGED CONDITIONS AND THE EXCESS DIRT FIGHT
The ground never matches the geotech report. Quantities move, hauling distances grow, and the change order fight starts after the cost is already spent.
This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the civil operating system page.
WHERE THE MONEY GOES.
Covered in full in the quick answer above. The sourced numbers and what controls it are below.
THE COST, SOURCED.
D2 Excavating v. Thompson Thrift. A $630K excavation subcontract produced far more spoil than planned. The dispute over the excess dirt ended in a judgment for the subcontractor above half a million dollars, decided at the Fifth Circuit.
IN THEIR OWN WORDS.
No change order, not paying.
Mike Holt forums, GC dirty tricks thread, quoting a GC after directed extra work
Always get it in writing.
Mike Holt forums, GC dirty tricks thread, quoting a GC after directed extra work (same thread, the lesson the poster drew after settling for half)
THE NUMBER TO MEASURE IT AGAINST.
Civil contractors run about % net profit at $1M to $5M, rising to roughly 10% at $5M to $10M. The CFOS target at $1M to $5M is10%, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.
Gross margin over the same bands runs % to 23%, against a CFOS target of 10%.
THE SYSTEM THAT FIXES THIS.
Cost codes built against the estimate, so a job can be read while it runs.
FREQUENTLY ASKED.
