EROSION CONTROL MAINTENANCE PROFITABILITY — PER-SITE, VISIT FREQUENCY, AND CORRECTIVE ACTION.
An erosion control maintenance portfolio that looks acceptable in aggregate often contains 20–30% of sites that are unprofitable — subsidized by the profitable majority, invisible without per-site cost tracking. The sites that lose money are usually losing money for one of three reasons: inspection frequency exceeds the contract assumption, corrective action costs are being absorbed without billable recovery, or the site was priced on a utilization assumption that has not been validated against actual service cost. None of these are identifiable without per-site cost data.
SPM builds per-site cost tracking for erosion control and SWPPP maintenance contractors as the foundation of the CFOS implementation. Most clients identify 15–25% of their portfolio as margin-impaired in the first 60 days of tracking.
THREE FACTORS THAT DETERMINE WHETHER MAINTENANCE CONTRACTS ARE WORTH KEEPING.
Per-Site Cost vs Per-Site Revenue
An erosion control maintenance contract is profitable when the per-site cost of servicing — inspection time, drive time, BMP maintenance, corrective action — is less than the per-site revenue. When it is not tracked per-site, the profitable sites cross-subsidize the unprofitable ones and the portfolio looks acceptable in aggregate while losing money on 20–30% of sites. The fix is per-site cost tracking: inspection hours coded by site, drive time coded by site, material usage coded by site. One billing cycle of per-site data identifies which sites are underwater.
Visit Frequency vs Contract Revenue
Maintenance contracts are priced on an assumed visit frequency. A contract priced for weekly visits that actually requires twice-weekly visits — because the site has high inspector scrutiny, active grading activity, or repeated compliance failures — is generating revenue at the contract rate while consuming cost at twice the contract assumption. The site is structurally unprofitable. Tracking actual visits per site per month against the contract assumption identifies this within 60 days of per-site tracking implementation. Sites running above contracted frequency need to be repriced at renewal or exited.
Corrective Action Cost Recovery
Corrective action on maintenance sites — reinstalling failed BMP, cleaning inlet protection, addressing compliance notices — is billable when the cause is outside the original contract scope. If the BMP failed because construction activity expanded beyond the original disturbed area, the corrective action is a change order. If the inlet protection requires cleaning because of rainfall intensity outside the maintenance frequency assumption, the additional visit is billable. Most erosion control contractors absorb all corrective action costs as part of the base contract because the documentation process for billable corrective action does not exist. Build the process: every corrective action gets a cause determination before the crew deploys.
THREE ACTIONS THAT IDENTIFY AND FIX THE MARGIN PROBLEMS.
The SPM client pattern: The $5.2M SWPPP/erosion contractor who went from $24K to $1.1M net profit had never tracked per-site profitability. The same revenue with per-site visibility revealed that a significant portion of the portfolio was unprofitable. Correcting the pricing on those sites — and exiting the ones that could not be repriced profitably — produced a 30% net margin on $1.6M less revenue.
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