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Margins in construction are tight. They always have been.
Lately, they’re under more pressure — labour shortages, material volatility, and supplier constraints are biting harder than ever.
Every procurement delay, missing scope item, or vendor oversight chips away at profitability.
It’s often not one big mistake that does the damage. It’s a thousand little errors repeated across 30 packages, 15 projects, and 10 teams.
Below, we break down the bottlenecks costing you thousands and what it takes to fix them.
Margins in construction aren’t generous. Many contractors operate between 2% and 5%. Even small inefficiencies can have an outsized effect on profitability.
When a single package on a £10 million job runs 5% over due to a missed scope item, that’s £500,000 gone. Stack a few of those, and you can quickly turn a project into a loss.
Scope gaps, late approvals, and duplicated pricing often hide under admin and rework. They’re spotted too late and usually appear too small to flag until they accumulate. You’re not just battling cost overruns. You’re fighting the compounding effect of inefficiency.
Margins tend to disappear quietly — one missed exclusion, one slow contract, one unchallenged rate at a time.
Procurement breaks down when teams don’t know what’s happening.
Status updates live in inboxes, spreadsheets, and chat threads, with no single source of truth. One contract admin updates a tracker, another forgets, and no one really knows which packages are on track or weeks behind.
Most updates come from chasing people.
You can lose hours to phone calls, messages, and endless email threads. That’s every week, for every trade. Those answers might vanish if someone goes on leave, gets sick, or moves on.
Missing a delay means missing a chance to fix it. A late façade package doesn’t just cost time, it drags out scaffolding hire and holds up follow-on trades. By the time anyone notices, the cost is baked into the programme.
Tendering isn’t just about sending documents — it’s a pressure test.
When tender packs are scattered across inboxes, folders, and spreadsheets, deadlines slip. Scopes get watered down. Prices inflate because subcontractors hedge their bets around confusion.
Subcontractors can’t price what they don’t understand. They often won’t chase clarity if they’re quoting multiple jobs.
When changes are buried in forwarded emails or random attachments, assumptions creep in. A cladding contractor might see three versions of a spec — two outdated, one revised — and guess what’s correct.
Those misalignments become variations. Usually discovered after contracts are signed, when it’s too late to contest.
• Multiple versions of tender documents.
• Isolated clarification threads.
• Conflicting information across drawings, specs, and BOQs.
Each clarification takes time to draft, send, and follow up. Multiply that by how many subbies you invite, and you spend hours chasing clarity before a single quote even lands.
On a health precinct project in Brisbane, one contract admin spent 12 hours clarifying a mechanical package. Four subcontractors asked the same question, each with a different version of the tender pack.
• Repeated clarifications waste time.
• No single record of who got which documents.
• Admin cost blowouts from re-explaining scope.
Scope gaps are margin killers.
A carefully planned programme and strong supply chain mean little if the scope is incomplete or unclear. Subcontractors either underprice and claim variations later, or overprice to protect themselves. Either way, you pay.
Every project team has its own way of writing scopes.
Some reuse old Word documents. Others paste consultant specs or scribble on PDFs. Without a single, consistent structure, you can’t tell if key items were covered unless you read every word. That inconsistency is risky for both pricing and delivery.
• Different formats lead to missed inclusions.
• Some scopes list what’s in, others what’s out.
• Outdated references often carry the wrong details.
On one Melbourne project, a façade package was scoped in three bullet points. No brackets, sealants, or fixings. The variation landed three weeks into install.
When scopes are incomplete, the contractor wears the cost.
Often, it’s a change order that plugs scope holes after signing. Either way, there goes the margin. Once a subbie is onsite, they hold the cards.
• Change orders plug scope holes post-contract.
• Variations inflate package value beyond budget.
• Delays follow from last-minute rework and resequencing.
In New South Wales, adjudications under Clause 17 of the Security of Payment Act 1999 often involve unclear scopes. It’s not just a commercial issue, it can turn legal.
Procurement doesn’t stall from poor planning alone — it waits for someone to hit 'approve.'
Recommendations often sit in inboxes. Subbies lose patience. Quotes expire or get inflated. Some subcontractors walk.
One person often controls approvals — a director, a commercial manager, or a regional lead.
When they’re swamped or onsite, approvals pile up. A façade package priced on March 8th might not be signed until March 19th. That 11-day delay cost £18,000.
• Single-point failures.
• No visibility of what’s stuck or why.
• Lost rates from expiring quotes.
When approvals run late, site dates shift.
Subbies can’t lock in labour. Long-lead items go unordered. By the time it’s signed, the original window is gone. The project ends up in a scramble to resequence.
A plumbing package in Sydney was delayed nine days, pushing ceiling works, fire services, and electrical rough-in out by three weeks. Overtime and weekend work followed, all at extra cost.
• Delays echo across multiple trades.
• Unplanned costs from out-of-sequence work.
• Project teams reshuffle and burn goodwill.
Using the same subcontractors might seem efficient, but complacency sets in.
When the same names get every invite, pricing becomes predictable. Some sharpen their pencils. Others inflate comfortably.
Familiarity breeds complacency.
If a subbie knows you’ll come back, they’re less likely to sharpen rates and can become less competitive over time. Loyalty should run two ways, so make sure your repeat business is valued.
• No benchmarking or healthy challenge.
• Reduced leverage — subbies won’t budge if they assume they’ll still be chosen.
• Inflated rates over time.
Overusing a single subcontractor can stall or sink your programme if they collapse or are overstretched.
Here's an unfortunate hypothetical: a contractor relies on one façade subbie for four active projects. The subbie collapses, and all four sites stall. Labour walks off. Materials in limbo. Recovery starts two months later at an inflated cost. Here's hoping you've never been in that scenario, but now you'll see the domino effect of supply chain risk.
• Labour conflicts when subbies juggle multiple jobs.
• Delivery delays from inaccurate capacity planning.
• Concentrated risk if one subbie goes bust.
Under the Construction (Design and Management) Regulations 2015, principal contractors must ensure suppliers are competent and resourced. Overloading a subbie can threaten compliance and delivery.
Most procurement teams collect piles of data and bury them in spreadsheets.
With no real-time insights, you can’t easily spot overspending, track trends, or compare vendor performance across jobs. It’s a gamble, and margin walks out the door unnoticed.
Excel tracking works until it doesn’t.
One broken formula or offline file can ruin your forecast. There’s no audit trail, and no easy way to compare budget vs. actual across teams.
• Manual inputs are prone to error.
• No change tracking for accountability.
• Data locked in silos.
Nobody noticed until final reconciliation.
Procurement data should answer simple questions.
Who delivered on time and under budget? How much did concrete cost per cubic metre last quarter in Greater Manchester? Which trades caused the biggest margin leakage?
Without those insights, teams rely on memory and guesswork.
• No benchmarking across projects.
• Blind spots grow unnoticed.
• Lost deals when you can’t negotiate from data.
Without live analytics, procurement is guesswork. And guesswork is expensive.
When contracts stall, momentum dies.
The tender closes, the recommendation gets approved, but the contract doesn’t go out. Everyone waits, a subcontractor chases once or twice, then stops replying, and the quote gets stale.
Quotes expire.
Subbies often limit them to 14 or 30 days. If the contract isn’t signed by then, the price no longer holds. Material and labour conditions can shift overnight. A quote from March might not survive to April.
For example, structural steel pricing being something of a hot-button topic, a delayed package in Brisbane jumped from $1.9 million to $2.15 million because of a six-week delay. The subbie cited exchange rates and workload. The contractor had no fallback plan and paid the difference.
• Expired quotes without notice.
• Shifting terms on materials and labour.
• Weak negotiating position when you’re late.
Silence from your side hurts trust.
Subbies see disorganisation, assume you’re shopping their number around, and lose interest.
• Damaged rapport from poor communication.
• Risk premiums in future pricing.
• Lost bidders who take other jobs.
Slow contracts don’t just cost time. They cost relationships, margin, and certainty.
Procurement breaks when each team makes up its own method.
Without a common structure for writing scopes, managing tender reviews, or securing approvals, you end up with patchy performance and zero oversight. Some rely on memory, others keep scattered notes. It’s not a system, it’s a collection of personal workarounds.
Mistakes recur when processes aren’t shared.
On a mechanical package in South Australia, the same drainage note was missed in three scopes over six months. Each time, it led to a variation. No one flagged it because there was no consistent scope checklist or knowledge sharing.
• Comparison sheets rebuilt from scratch each time.
• Old or irrelevant scope items copied across projects.
• Different approval chains with no transparency.
You can’t fix what you can’t see.
Growing without structure erodes margin.
It might work on five projects. At 20, cracks appear. One regional team runs smoothly, another is buried in admin. Head office can’t compare results because data isn’t structured. Mistakes multiply.
• Inconsistent file naming across teams.
• Disjointed workflows hamper collaboration.
• Failed software adoption when used inconsistently.
A growing business needs repeatability. Otherwise, you just amplify the chaos.
Use evidence, not opinion. Start with a clear scope, historical pricing data for similar packages, and competitor quotes to benchmark current rates.
It varies by project type, location, and risk profile. Most aim for net margins between 3% and 12%, but labour availability and market volatility can shift targets.
Procurement bottlenecks don’t just slow you down — they cost you. Missed approvals, vague scopes, and spreadsheet-driven chaos all chip away at margin. Fixing the process means fewer delays, sharper pricing, and stronger project outcomes.
Digital procurement delivers structure where there was none, visibility where there were blind spots, and consistency across every team, package, and region. When those foundations fall into place, profit follows.
If your team still works off Excel trackers and email threads, it’s time to try a connected procurement platform.
Book a demo of ProcurePro and see the difference.
James Metcalfe
