The estimate exceeds the budget: what to do before tendering

After tendering, every lever costs more. Once the tenders are in, reducing the project means asking for new prices on an amended file; in a private contract, that is negotiated under pressure, and in a public contract, it may require the procedure to be started again. Once the contract is signed, any change becomes a variation, discussed at the contractor's price and no longer at the market price.

In a public contract, the estimate determines the procedure. The pouvoir adjudicateur (aanbestedende overheid, contracting authority) must estimate the value of the contract (act of 17 June 2016, art. 16), and that estimate governs the procedure and the publication requirements. An estimate deliberately lowered to "make the project fit" settles nothing: it shifts the problem to the opening of tenders. If the tenders exceed the estimate, the act allows the authority not to award and to restart the procedure, if need be in a different way (art. 85), but at the cost of several months and a new tender.

In a private contract, the marché à forfait (lump-sum contract) freezes the price. Once a lump-sum contract is signed, changes only give rise to a variation if they were authorised in writing and their price agreed (old Civil Code, art. 1793, which governs contracts concluded before 1 September 2027; Book 7 of the Civil Code will apply to contracts concluded from that date). That protects the client, but it presupposes that the project is stable before signature: anything revised afterwards is paid for.

An overall gap does not tell you where to act. It has to be broken down into three causes, which call for different levers.

Programme first. Compare the programme as drawn with the programme written into the appointment. Any difference is a change of programme: it should have been the subject of a convention additionnelle (additional agreement) "stating its financial impact" (unofficial translation), as required by the code of ethics of the Order of Architects of 16 November 2022 (art. 16). If there is none, regularisation starts there.

Quantities next. With the programme unchanged, a project can consume more material than planned: a less compact form, a more extensive facade, greater ceiling height, longer service runs. That is a design matter, which the architect can deal with.

Prices last. A pure price gap often comes from a budget that was never updated: the budget was set at one price date, the estimate is expressed at another. Before talking about excessive prices, bring both figures to the same date.

A second estimate can settle the question. Where the client doubts the diagnosis, an independent counter-estimate prepared by a third party on the same documents makes it possible to separate the causes and document the gap.

The order matters. The first levers act on large amounts without degrading the quality of what is built; the last act on smaller amounts and with more risk.

This is the most powerful lever. Each square metre removed takes with it structure, facade, finishes, building services and future maintenance. Reducing circulation space, combining two rooms, giving up a secondary room: these decisions belong to the client, and the architect translates them into drawings. They are formalised in a priced additional agreement.

The second lever, often underestimated. Floor and wall finishes, internal joinery, sanitary fittings, kitchen equipment: the same project can move to a different range without changing the drawings. The effect of those choices on cost is covered in the article on the level of finish. The lever has a limit: it affects what the occupant will see and use every day.

Take out of the base contract what can wait. Landscaping of the surroundings, additional equipment or a finish variant can be described as options or conditional items, priced by the contractors but ordered only if the budget allows. How to draft them is a matter for the specification: see the article on variants, options and conditional items.

Spreading the work is not saving, but it can rescue the annual envelope. Deferring part of the works to a later phase reduces the amount committed today. The total cost often rises (two site set-ups, two tenders, price revision), and phasing must be built into the design so as not to force demolition later.

A general contractor or separate trade packages changes both price and risk. Separate packages may show lower prices, but coordination, interfaces and omissions remain with the client. This lever is decided before tendering and is covered in the branch on consulting contractors.

Only as a last resort. Asking the architect to "revise the prices" without changing the project amounts to lowering the thermometer. If the unit prices are justified, the market will confirm them when the tenders are opened. The only useful work on prices before tendering is to check the references and the price date.

Using up the contingency. The reserve for unforeseen site events is not a source of savings: it covers risks that will arise during the works. Homegrade, in the Brussels-Capital Region, recommends a reserve "of the order of 10% of the value of the works" (brochure "Maîtriser son chantier", 2022, unofficial translation); removing it to balance the estimate simply moves the gap onto the site.

Putting the problem off. Going out to tender in the hope that competition will close the gap is a gamble, rarely won when the gap comes from the programme or the quantities. If the tenders confirm the gap, the project will have to be corrected and put out to tender a second time.

Changing things without a record. A saving decided orally in a meeting and an area reduced without an additional agreement leave an inconsistent file. Estimate, drawings and budget no longer describe the same thing.

Cutting across the board. A reduction "of a few per cent on every item" corresponds to no design decision. It shifts the gap to the tenders.

The decision belongs to the client, and it is documented. Once the diagnosis is made and the levers are priced, the client chooses: reduce, defer, or increase the budget knowingly. The most effective form is a short note that quantifies the gap, breaks down its causes, compares three to five options and records the decision. The method is set out in the article on preparing the trade-off note when the estimate exceeds the budget.

Each change of programme adopted goes through an additional agreement stating its financial impact (art. 16). That agreement sets the new reference budget with the architect.

If the gap is not corrected, the question of liability arises. Where the architect does not present a design brought back within the envelope and the gap stems from the design, the possible steps are described in the article on when the architect exceeds the budget. Here again, they presuppose a written file.

Upstream checking remains the best prevention. An estimate checked at each phase, on the same quantity base, the same price date and the same items, flags the gap while it is still small: see the article on checking the architect's estimate.