Permit Review Rewrites the Job You Already Signed For
The city holds the grading permit, the engineer is redlining the civil set, and your silt fence has to pass inspection before a blade touches dirt. You signed against the bid set.
A site package gets bought out early because the site contractor has to mobilize first, which means the subcontract is executed off bid-set quantities. Every trade behind you signs against permit drawings. You signed against drawings that were still under review, so the quantity delta turns into a fade in your unit costs, and there's no revision postdating your signature to point at.
The size of it
You absorb two to six weeks of cost with zero production, then build a revised design at bid-set pricing. The delta comes off your margin because the contract closed before the permit set issued.
Two clocks gate the first day of production and you own neither one. The NPDES Notice of Intent and the local grading permit have to issue before clearing starts, and the civil plan set gets redlined inside that same review cycle. Perimeter BMPs go in ahead of everything: silt fence, construction entrance, inlet protection, and sediment basin, all installed and inspected before any clearing, so the first week or two on site is pure cost against a line the GC prices like a rounding error. Then the permit set drops with cut/fill, pond volumes, and pipe that don't match the drawings you signed.
Three moves, in order
Step 04: Estimating system
The estimate maps one to one onto the job cost codes, so variance means something the day it appears.
What else costs sitework contractors money
The same mechanism in other trades
What sitework owners ask
Permit set quantities different from bid set sitework contract?
The city holds the grading permit, the engineer is redlining the civil set, and your silt fence has to pass inspection before a blade touches dirt. You signed against the bid set.
What does it cost?
You absorb two to six weeks of cost with zero production, then build a revised design at bid-set pricing. The delta comes off your margin because the contract closed before the permit set issued.
What do I do first?
Write the permit condition into the subcontract: production starts the day the grading permit issues, and remobilization after that date is at your rate.
What are sitework contractors supposed to be making?
Sitework runs 18% gross margin, 15% overhead and 3% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 4 points below it. The CFOS target is 10%.
Which part of the system fixes it?
The step is number 04, estimating system. The estimate maps one to one onto the job cost codes, so variance means something the day it appears. It comes from chapter 4 of CONTROL: The Construction Financial Operating System.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for sitework contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.