Most owners have been here. The new GMP comes in higher than the last one, and the explanation is a single line: “market conditions” or “scope refinement.” You approve it or you don’t, but you still don’t really know what happened.
A few months ago I compared two versions of a GMP on a senior living project, issued about ten months apart. The number had gone up $2.85 million, close to 7%. Nearly all of it came from site work. The soils were worse than the original geotech assumed, the storm sewer was redesigned, and the water line material changed.
Figuring that out wasn’t hard. What matters is what the GC does with it.
When a sub’s price goes up because of soil conditions, a lot of GCs just pass it through. Site conditions changed, not our fault, here’s the new total. You can defend that on paper, and it’s the easy route. But it isn’t really doing the job.
The job is to dig into that scope before it ever lands in the GMP. Is the sub pricing the worst-case soil or what’s actually out there? Could a different foundation or utility route avoid the bad soil altogether? Is the storm sewer redesign the only way to meet the civil requirements, or would a sequencing change shrink it? Does the water line change have to happen now, or can it be phased? None of those are estimating questions. They take people who’ve built enough of these projects to know where a sub’s number has room in it and where it doesn’t.
Anyone can collect bids and roll them into a GMP. Bringing the number back down through redesign, resequencing, or pushing back with a real alternative (not just asking for a discount) takes people who know the design well enough to change it without breaking something else. Every contractor has only a handful of those people, usually the most experienced ones, so it doesn’t happen on every job. Passing the number through is a lot easier.
This isn’t about going after subs or assuming every increase is padded. Soils really do go bad and storm sewer scopes really do change. Sometimes the number is right, and the honest answer is “yes, this is real, and here’s why.” You just can’t know that until someone with design experience has tested the assumption. That’s a different skill from estimating, and as margins have tightened and precon teams have gotten leaner, a lot of the industry has stopped investing in it.
If you’re evaluating a GC, ask them directly: when a number moves, who reviews it, and what’s their background? An estimator can tell you the price went up. It takes someone who can read the drawings and the geotech report, and who knows a few ways to deal with bad soil, to tell you whether it should have.
One kind of contractor manages your cost. The other just reports it to you.
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