Death by a Thousand Cuts: Managing Redundancy in Estimates

On alternative-delivery projects, it’s not uncommon for Guaranteed Maximum Price (GMP) submittals to appear reasonable when reviewed line-by-line, yet become surprisingly high when viewed in total. One of the biggest reasons is that some contractors load their estimates with large numbers of redundant or overlapping bid items, child items, and activities. Each individual line may look harmless, but collectively these small adds quietly drive global pricing beyond what is truly reasonable. At ICE Teams, we refer to this trend as “death by a thousand cuts.”

 Beyond item proliferation, cost growth can also be buried in places most owners don’t immediately review. We routinely see additional dollars embedded in direct labor build-ups, staff rates, indirect labor markups, and even in equipment rates. Individually, many of these cost factors may seem justifiable; however, without clear mutual structure and agreed-upon rate conventions at the outset, these additions accumulate into significant cost exposure. A major lesson learned is that the structure of bid items should never be left open-ended. As an Independent Cost Estimator, we now make it a standard practice to jointly develop the bid and child item framework with the contractor before estimating begins so we eliminate duplication and scope inflation through excessive activity segmentation.

 Equally important, we aim to pre-establish direct and indirect labor rates, equipment rates, and typical “plug” pricing for subcontractor and material unit costs. When the underlying economics are agreed to early, the focus of negotiation shifts to true project scope and productivity assumptions—not hidden markups or embedded multipliers. This upfront alignment becomes especially critical on complex, phased, or fast-track alternative delivery projects where transparency and speed matter.

 Finally, one of the most powerful tools we use is key global metrics to quickly test the reasonableness of the estimate as a whole, rather than just reviewing details item by item. We look at cost per linear foot, cost per cubic yard, cost per bridge span, labor productivity metrics, self-performed ratios, staff loading factors, equipment utilization, and a wide set of unit-level and global benchmarks. These metrics help us sort and filter issues quickly, flag anomalies, and identify where the estimates are diverging from industry norms or previous milestones. Instead of debating hundreds of line items, we can pinpoint real problem areas in minutes and focus discussions where they matter. These tools have become essential in protecting owners from excessive GMP pricing and ensuring transparency throughout the negotiation process.