Construction Dive quoted Partner James Miller in an article about cost overruns on construction jobs.
By Kim Slowey
Often indirect costs, also referred to as burden or markup, are loaded into the company’s estimating system and then forgotten. Often no one makes sure they are updated for inflation or otherwise adjusted to reflect what the company can expect to pay for these items, so bids will never cover costs.
“They didn’t adjust it during the takeoff and estimation phases of the contract, so they are already going in with a profit fade built into the contract,” Miller said.