Construction / Bid Margin
Representative construction bid margin scenario
Representative case study — not a verified customer outcome.
A subcontractor prices labor and materials on the base bid but under-reserves for mobilization, inspection cycles, and schedule slip — margin looks intact on paper until field burn catches up.
Input set
- Base contract $620,000, bid margin target 18%
- Crew 8, field burn $2,850/day, 12-day slip risk on critical path
- Allowance $18,000 for rework / re-inspection
Hidden loss
Delay burn and re-mobilization are excluded from the headline bid — modeled hidden exposure ~$34,000–$42,000 on this illustrative schedule input.
Schedule & mobilization margin leak
Calculation result
Headline bid implies ~17.5% margin; loaded field burn and slip reserve pull modeled net margin toward ~11–13% vs the 18% target (representative simulation).
Contract value minus loaded direct cost, schedule-disruption reserve, and remobilization buffer; net margin compared to target band.
Suggested action
Increase bid reserve or tighten schedule assumptions before tender submission if modeled net margin falls below target.
Estimated impact: Modeled margin compression band on this synthetic bid — not verified project savings.
Methodology note
Deterministic construction overrun model with user-entered burn and slip days — illustrative framing for bid review, not a guarantee of field outcome.
- Burn rate flat across slip days
- Rework allowance entered explicitly
- Representative scenario — modeled exposure, not a verified customer outcome.
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This is a technical simulation and decision-support output. It is not financial, legal or engineering advice. Verify all results before making business decisions.