What is cost drift on a construction job?

Cost drift is the slow gap between the price a job was won at and what it actually costs: a subcontractor price that moved, quantities that came in higher, a cost code nobody reconciled until the final account. No single line looks like a problem. Together they take the margin.

How it shows up on a job

Nobody saw the job drift until the final account.

Actuals are reconciled against the budget monthly, or only at the final account.
A cost code is running over and nobody has compared it to the tender.
Quantities are coming in above the take-off, a little at a time.

What it costs

Across 258 transport projects in 20 countries, roads came in 20% over budget on average: $1,000,000 on a $5 million job.
Source: Flyvbjerg, Holm & Buhl, Transport Reviews 24(1), 2004
836 Australian transport projects cost $28 billion (24%) more than promised, and about a third of them went over budget.
Source: Terrill & Danks, Cost overruns in transport infrastructure, Grattan Institute, 2016
Over a quarter of Australia's 200 largest builders posted an operating loss in the year to March 2022.
Source: Reserve Bank of Australia, Financial Stability Review, October 2022, Box C

What we don't know. Nobody has reliably measured what share of an overrun the contractor carries rather than recovering through variations. On a 9% margin, a 9% overrun that cannot be recovered takes all of it.

Every figure, worked through one $5 million job: what the five diseases cost a $5 million job. The full evidence, with every caveat: why the diseases are in this order.

How Demiton catches cost drift

Drift against the price you quoted is flagged at $50K, not $5M.

Your systems stay where they are. Demiton reads them into registers, and these are the ones that watch for cost drift:

The cures roll out one disease at a time, starting with lapsed compliance. Until each is live, the facts it runs on land in your registers, one question away in Claude or ChatGPT.

Start free What each plan protects

Common questions

How much does cost drift cost?

Across 258 transport projects in 20 countries, roads came in 20% over budget on average: $1,000,000 on a $5 million job. Nobody has reliably measured what share of an overrun the contractor carries rather than recovering through variations. On a 9% margin, a 9% overrun that cannot be recovered takes all of it.

How does Demiton catch cost drift?

Drift against the price you quoted is flagged at $50K, not $5M. It reads the systems you already run, so nothing is replaced.