It’s one thing to shave profits or even lose money on a project, but it’s an entirely different ballgame when a project turns out to be a “wholesale financial disaster” that can set a company back or even bankrupt it.
Contractors must spot a potential loser project even before bidding – and know how to mitigate losses if problems are identified after a project starts.
Here are concrete steps that contractors can take throughout the life of the project to best protect their bottom line.
A good rule of thumb is to buy 80 to 90 percent of the materials within 30 days of the contract award.
PURSUING JOBS – OR NOT
The chief estimator alone should not decide which job to bid. It should be a team effort. Higher-level executives should also be familiar with the potential project.
Contractors should choose projects where they are able to cap or limit liquidated damages, and they should never bid a job that has a contract stipulating the potential for the contractor to incur actual damages.
“If it doesn’t have liquidated damages, where you know what it costs you if you’re late, don’t bid it,” industry veteran and licensed engineer Bryon Willoughby shares
AVOIDING LOSER PROJECTS AT BID TIME
Contractors should thoroughly review and understand the project’s contract, plans and technical specifications before forming an estimate.
Best practices:
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Contracts should be reviewed by either a lawyer or at least someone with claims resolution experience.
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Bids need to be reviewed by asking detailed questions about “what-ifs,” and then proofread by a second set of eyes because most bids typically include some type of mistake.
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If a project is complex, also perform a detailed schedule review.
“If you think it's a 24-month job, but then later you realize it's actually a 32-month job, that's a problem,” Bryon says.
EXECUTION PHASE
Preconstruction
During preconstruction, contractors should make sure there is a solid transition between the bid team and the build team, and it’s even better if a build team member can be involved in the bidding process.
Pro Tip: A build team needs to be assembled in a timely manner. Don’t wait on a manager that is finishing up another project or hire a new project manager on the spot. Assign a company executive to oversee how the project is proceeding and being managed.
Scheduling
Don’t submit schedules late. Even if a project doesn’t require a 60-day or a 90-day preliminary schedule, draft one anyway because it will serve as a generic roadmap that can be more feasibly amended if major problems are discovered early in the project.
Pro Tip: Build schedules with clearly defined activities, durations, sequencing and responsibility—not just broad phases—so you can quickly identify delays, adjust timelines and hold teams accountable as conditions change.
Early Work
Identify and submit high priority submittals early on, especially factory-made materials such as structural steel or a certain type of precast concrete. Don’t be late for subcontracting with other trades and buying materials.
Pro Tip: A good rule of thumb is to buy 80 to 90 percent of the materials within 30 days of the contract award. Assign temporary resources to kickstart the process.
Ongoing Operations
As the project progresses, monitor schedule slippage and address delays early. Document any impacts and request time extensions or change orders to cover added costs.
Pro Tip: If the change is on the contractor, hold the employee accountable.
RECOVERY PHASE
If a major problem throws a wrench into a project, start preparing immediately to recover any potential losses that could be incurred.
“Once you’ve identified a problem project, don't run from it,” Bryon says. “Treat it as an opportunity to learn.”
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Actively manage struggling projects to reduce losses.
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Consider incentivizing teams to minimize impact
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Provide prompt notice to the owner when issues cause delays or added costs
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Maintain clear, well-documented schedules to demonstrate delays and responsibility
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Track all cost overruns in real time
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Carefully review change order language to avoid unintentionally waiving rights
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Support claims with detailed documentation and a clear narrative
PUTTING IT ALL TOGETHER
To avoid problem projects from becoming wholesale financial disasters, remember this above all else: formalize the process and maintain executive oversight.
“There are no bad project managers or chief estimators…that’s on you.” Bryon says. “Your job is to watch after those people.”
Bryon shared these insights and more at the CONEXPO-CON/AGG 2026 session, Avoiding and Managing Problem Projects. Watch the full session by purchasing On Demand Education Access from the CONEXPO-CON/AGG 2026 show.
PHOTO COURTESY CONEXPO-CON/AGG
