Why before tendering
The HOAI expressly provides for this checkpoint. Under Annex 10, work phase 3 includes the "cost calculation under DIN 276 and comparison with the cost estimate" (unofficial translation, as are all quotations in this article). By this point at the latest, the variance is visible, and until contract award it remains essentially a question of design.
For public contracting authorities, the VOB/A (Vergabe- und Vertragsordnung für Bauleistungen, Part A, the rules on awarding construction contracts) adds a limit. Section 2(6) VOB/A provides: "The contracting authority should only invite tenders when all tender documents have been completed and when execution can begin within the stated periods." A tender in the hope that bids will come in lower than the authority's own cost calculation therefore presupposes a completed design that already misses the budget.
And testing the market is expressly ruled out. "Conducting award procedures for the purpose of market research is not permitted" (section 2(5) VOB/A). A client who tenders to see what comes out, intending to cancel if prices are too high, risks running the very kind of procedure that section 2(5) VOB/A rules out. In addition, according to published case law, cancellation for lack of funding presupposes a methodologically careful, up-to-date cost estimate for the same scope of works, and the overrun must not have been foreseeable for the contracting authority (OLG Düsseldorf, order of 29.08.2018, VII-Verg 14/17, a case above the EU thresholds). A client who already knows of the overrun from its own cost calculation can hardly rely on it being unforeseeable.
The VOB/A does not apply to private clients, but the economic logic does. A private client who puts an overpriced design out to tender also receives bids on that design, ties bidders and designer into a round that will have to be repeated, and loses time.
Diagnosis first: price, quantity or programme
Before savings are discussed, it must be clear where the difference comes from. An overrun almost always combines three causes, and each calls for a different response.
| Cause | Typical sign | Who decides |
|---|---|---|
| Programme | More floor area, additional functions, changed use compared with the cost estimate | The client, because these are the client's objectives |
| Quantity and level of design detail | More precise quantities, structures or building services that were still lump sums in the estimate | Designer explains, client assesses |
| Price and price base | Different unit prices, later price base, market assumptions | Designer justifies, client checks, where appropriate through a third party |
Allocating the causes is not a formality. A difference arising from programme extensions is a consequence of the client's decisions. A difference arising from unrealistic prices in the Kostenschätzung (cost estimate) may be a question for the design team. How figures typically shift between the cost estimate and the cost calculation is described in the article on moving from the cost estimate to the cost calculation.
If the diagnosis is disputed, a second determination helps. A review by an independent third party on the same documents separates price issues from quantity and programme issues; when it makes sense is described in the article The independent third-party cost review.
Where a cap was agreed
If a budget was agreed as a Baukostenobergrenze (construction cost cap), the overrun is not just a project problem. On the trend of published case law, the design is then defective, with possible consequences for damages and the fee. These rights are set out in the article When the architect exceeds the cost limit: the client's rights.
For the decision before tendering, this means two things. The client should record the overrun in writing before commissioning any redesign, so that the cause remains documented. And before commissioning the redesign, the client should clarify whether it will be paid for separately; that may depend, among other things, on who is responsible for the overrun.
The levers in the right order
The most effective levers lie where most of the cost arises, and that is rarely the unit price. The client therefore tests them in a fixed order, from the greatest to the smallest effect on cost and from the smallest to the greatest effect on bidders' confidence.
Programme and floor areas. Every square metre that is not built saves all the costs attached to it: shell, fit-out, building services, operation. Questions: which rooms are indispensable and which are desirable? Can areas be combined or put to multiple use?
Standard. Facade, quality of fit-out, technical equipment. A distinction must be drawn here between the standard the use requires and the standard that concerns how the building presents itself. Every reduction is assessed for its effect on operation and maintenance, not just for the saving in construction costs.
Options. Items that can be retrofitted later without incurring additional structural costs today. A client who takes them out should keep the necessary provisions in the design.
Phasing. Construction phases that can be postponed. This lowers the cost of the first phase, not the total cost, and it requires a design that allows for the later extension.
Packaging of works and form of contract. The choice between separate trade packages and a general contractor, and between a unit-price and a lump-sum contract, shifts risks and coordination effort. It rarely lowers the cost calculation directly, but it can reduce the risk of a later overrun.
Prices last. Correcting the prices used is only a lever if a review has found them to be set too high. A price cut without justification makes the cost calculation smaller, not the project cheaper, and pushes the overrun into the tender stage.
Every design change is a change order
Whatever the client has changed in the design alters the contract with the designer. Under section 650q(1) BGB (Bürgerliches Gesetzbuch, the German Civil Code), the right to order changes under section 650b BGB also applies to architects' and engineers' contracts. For remuneration following such an Anordnung (change order), section 650q(2) BGB applies "the fee calculation rules of the Fee Regulations for Architects and Engineers" insofar as the services are covered by the HOAI; otherwise section 650c applies accordingly.
For the budget this means that the redesign has a price of its own. It belongs in the decision paper next to the expected saving. How the HOAI adjusts the fee after a change in services is covered in the article on changes of scope and fee adjustment. A saving of a few per cent can be largely eaten up by the cost of redesign and the time lost.
The decision itself
In the end there are three possible decisions, and all three are legitimate. The client can change course until the cost calculation is back within the budget. The client can save part of the difference and deliberately raise the budget by the rest. Or the client can adjust the budget as a whole, because the programme requires it.
The only thing that is not legitimate is silent acceptance. A cost calculation above the budget that is approved without an express decision becomes the new budget without anyone having decided it. The decision therefore belongs in a separate document that brings together variance, causes, options, consequences and resolution. How such a paper is set out on two pages is shown in the article Preparing the decision paper on a budget overrun.
For federal building projects, responsibility is laid down. Under the RBBau (Richtlinien für die Durchführung von Bauaufgaben des Bundes, the federal guidelines for carrying out building projects, E 3.3), only the Lenkungsebene (steering level) decides on changes that substantially alter the framework of the project, and if the approved framework cannot be kept to, a decision must be obtained from the body that approved the project or released the funds. For private clients this is a useful model: whoever decided the budget also decides on changing it.
This article reflects the state of the rules and of case law at the date of checking (21 October 2026) and is intended for professional guidance. It does not replace legal advice or an examination of the individual case.