The dashboard in seven lines
Seven lines are enough, provided they are all kept at the same date and in the same unit (excluding VAT, or IVA). Each answers a different question; only the last one is for making decisions.
| Line | What it contains | Where the figure comes from |
|---|---|---|
| Initial budget | the works figure approved by the client, with its price month | architect's appointment, design estimate |
| Contracted price | the price of the signed contracts | contracts and annexes |
| Approved extra works or modifications | changes accepted in writing, with their price | signed instructions, addenda, approved modificados (contract modifications) |
| Changes under discussion | claims received and not accepted, at their probable amount | contractor's letters, own estimate |
| Measurement overruns | the difference between the contract quantities and those expected at completion | interim certificates, quantities from the dirección facultativa (the site direction team) |
| Price revision | the effect of the agreed formula, paid and outstanding | contract or tender specification clause, published indices |
| Forecast final cost | contracted price plus the four deviation lines | calculation by the client or its adviser |
The contingency reserve is read against the forecast. A reserve half spent before the finishes have even started is a warning sign, even if the contracted price has not moved.
Contracted is not final
The contracted price is reassuring, and that is its flaw. It reflects only what is signed. Changes under discussion go in at their probable amount, not at zero because disputed, and revision and quantities are projected to completion: an item whose measured quantity already exceeds the contract quantity halfway through execution signals a final overrun.
The rhythm: every interim certificate
The dashboard is updated at the pace of the interim certificates (certificaciones), because that is when the information arrives. Each certificate records the work carried out, item by item. The mechanics of financial monitoring of the works and the analysis of cost deviations are covered in the guide to quantities and budgets.
An interim certificate is a payment on account, not an approval. In public works, article 240.1 of Law 9/2017 on Public Sector Contracts (Ley de Contratos del Sector Público, LCSP) provides for monthly certificates, paid on account, subject to correction at the final measurement and "without in any way implying approval and acceptance of the works" (unofficial translation).
In private works, the rhythm is set by the contract. Law 38/1999 on Building (Ley de Ordenación de la Edificación, LOE) gives the director de la ejecución de la obra (the works execution director) the task of preparing and signing the interim certificates and the final account (art. 13.2.e), and the director de obra (the works director) the task of approving them (art. 12.3.e). Requiring certificates detailed item by item, rather than an overall percentage of progress, is the condition for seeing which item is drifting.
Closure has a date and a document. The acta de recepción (the certificate of acceptance) must record "the final cost of the material execution of the works" (LOE, art. 6.2.c). The initial budget is compared against that figure, which is best reached without surprises.
The four sources of deviation
A deviation in the final cost almost always has one of four causes. Changes in a private fixed-price contract, where article 1593 of the Civil Code allows an increase in the works authorised by the owner without requiring written form. Modificados in public works, limited by percentages of the initial price (arts. 204 to 206 LCSP). Measurement overruns, which in public works are not a modification up to 10% of the initial price (art. 242.4 LCSP). And price revision, whose effect depends on the price date of the budget.
Three practices ruin the dashboard: accepting a change by word of mouth and without a price, mixing amounts with and without VAT, and leaving the initial budget undated. The decision remains the client's: reduce an item still to be built, draw on the reserve or accept a higher forecast knowing why.
The articles in this branch
- Extra works under a fixed-price contract: article 1593 of the Civil Code, the tacit authorisation accepted by several judgments according to legal commentary, and the written procedure that protects the budget; the note on the cost of the client's withdrawal sits beneath it.
- The limits on modifications in public works: the LCSP percentages turned into budget lines.
- Measurement overruns: the 10% that is not a modification and that arrives with the final certificate.
- Price revision and the date of the budget: the price month and the provision, in private works too, where there is no statutory revision.
This article reflects the state of the rules on the date of verification and is intended as professional guidance. It does not replace legal advice or an examination of the specific case.