My project is over budget: what can a construction economist do?

Before looking for savings, you have to understand where the overrun comes from. That diagnosis entirely determines the strategy: the levers available, their effect on the project and their feasibility within the current programme are not the same according to the cause.

The situations where the levers are most constrained are those where the overrun surfaces late, or where its causes are hard to correct without a heavy effect on programme or quality. It is precisely to avoid them that regular cost monitoring throughout design is so valuable.

ℹ An order of magnitude from practice, 1, 10, 100 A change of brief costs 1 at concept stage, 10 at developed design or tender, and 100 during construction. The earlier an overrun is caught, the less it costs to correct. That is the fundamental reason the outline estimate, the developed-design measure and the monitoring of tenders are investments rather than expenses.

This is the most powerful lever, and the least popular. Reducing the area of the project, removing a level, simplifying the communal spaces, deferring a phase: these decisions recover the approved envelope without degrading the quality of what remains. The economist prices the effect of each reduction scenario precisely so the client can choose with full knowledge.

Without touching the brief, it is often possible to recover 5 to 15 % by revisiting the technical choices on the heaviest packages: simplifying the form of the building, a compact building costs less per square metre than an L or a U, rationalising the structure, optimising the mechanical systems. The economist identifies the items that carry weight and produces priced variants for each.

The level of specification adopted at concept stage is not always the one that must prevail. The economist can propose a rereading of the brief distinguishing the non-negotiable items, regulatory, functional, or tied to long-term quality in use, from those that can be revisited without materially affecting the value of the project.

This is often the most stressful situation: the project is technically defined, the design work is done, and the contractors have priced, for example, 20 % above expectation. The options are fewer than during design, but they exist.

On public contracts, these options depend on the procedure. An offer is unacceptable when its price exceeds the budget appropriations allocated to the contract, determined and established before the procedure is launched, and not when it merely exceeds the estimate (L2152-3); in a tender procedure, it is eliminated, and the buyer cannot negotiate: it may only ask the contractors to clarify the content of their offer (L2124-2, R2152-1, R2161-5 and R2161-11). If the tender procedure has received only irregular or unacceptable offers, the contracting authority may continue under the negotiated procedure or competitive dialogue, provided the initial terms of the contract are not substantially altered (R2124-3, 6°, and R2124-5), or discontinue the procedure (R2185-1) and launch a new one; reducing or phasing the brief to the point of substantially altering those terms requires a new procedure (CE, 25 July 2001, no. 229666, former code). Under the adapted procedure, the buyer negotiates only if it announced it from the launch of the consultation, or reserved the option at that point (CE, 18 September 2015, no. 380821, former code).

The levers that follow therefore apply as they stand on private projects, where negotiation is free, subject to good faith (Civil Code, art. 1104 and 1112). On public contracts, they can be used only within a procedure that allows negotiation, with all the contractors admitted to negotiate and in writing (R2161-17 and R2161-19 under the negotiated procedure).

The economist analyses the gap between the offers received and their own estimate for each package. For every package over budget they identify where the room for negotiation is greatest: items over-priced against the median, site constraints the contractor may have over-valued, excessive contingency provisions. The negotiation, where the procedure allows it, bears on those specific items, with documented technical arguments.

On some packages the economist can propose variants that reduce cost without degrading performance: an equivalent but cheaper material, an alternative construction method, the simplification of an architectural detail. Variants go to the architect and the engineers for technical approval before being put to the contractors; on public contracts, they are put to them only within a negotiation the procedure allows, in writing to all the contractors admitted to negotiate and with the same deadline for amending their offer (R2161-19 under the negotiated procedure).

If the overall envelope cannot be held, phasing spreads the investment over time: carrying out the indispensable packages first and deferring secondary works to a later phase. That option is not always available, planning constraints, constructional logic, but it can unlock situations where funding is the principal obstacle.

The table sets out, trade by trade, the savings with real impact, those with little effect on final quality, and the points an economist will never recommend touching.

ℹ What should never be sacrificed Some apparent savings are paid for dearly over time: under-sized thermal insulation (energy bills, discomfort), inadequate waterproofing (leaks, damage), degraded acoustic performance (nuisance, loss of property value). The economist advises the client on the trade-offs, but also has a duty to flag clearly the savings that damage the value and durability of the project.

An overrun during construction is the hardest to control: commitments are made, contractors are on site, and room for manoeuvre is narrow. The economist then works on two fronts.

Every request for additional work is examined rigorously: checking that the work is not already covered by the original contract, negotiating the price on the basis of the contractual price build-ups, and the design team confirming the need before signature. On a public contract that refers to the CCAG-Travaux 2021, a site instruction from the design team that modifies the amount is first approved by the client (art. 3.8.1); for work whose price the contract did not provide, it sets provisional prices, which the variation then settles (art. 13.4 and 13.5). On a private lump-sum contract, an additional payment requires written authorisation and a price agreed with the client (Civil Code, art. 1793). A badly examined variation can easily represent 5 to 10 % of the package.

If unavoidable overruns loom, a ground discovery, existing structure in a condition the survey did not show, the economist helps the client decide: what savings can be found on packages not yet executed to offset the additional cost? Can some finishes be revisited to absorb the overrun without touching the structural packages?

Faced with an overrun, the first action is always the diagnosis: identify the cause, when it surfaced, and the levers available. The earlier it is caught, the more numerous and the cheaper the options. The economist has a full toolbox, revisiting the brief, technical variants, targeted negotiation, phasing, control of variations, which they adapt to the phase and the specific cause. Their role is not merely to record the gap but to find the way back into the envelope without degrading what really matters in the project.

The nature of the figures quoted

The percentages and amounts quoted on this page are orders of magnitude for framing, not measurements. They illustrate mechanisms and proportions, and they substitute neither for a tender exercise nor for an estimate prepared on drawings.