A fixed-price project is consuming more effort than expected. What should we review?
Margin erosionCheck remaining scope, rework, staffing assumptions, and approved changes. Protect the agreed outcome while making commercial decisions about extras and recovery explicit.
What to do now
- Compare estimated and actual effort by work type
- Identify unapproved additions and rework
- Reforecast remaining cost and margin
- Agree corrective and commercial actions
When to escalate
Escalate when
The forecast loss or contractual exposure exceeds management tolerance.
Who decides
The budget owner and authorized finance representative
Example
A consultancy separates genuine defects from additional requested workshops before updating the forecast.
Mistake to avoid
Reducing required quality to preserve the original margin.
Prevent a repeat
Review remaining cost and commitments, not only money already spent; reconcile with the authorized finance source.
Related cases
- The project is spending faster than planned. What should I check first?Unexplained cost variance
- The client paid less than the invoice. How should the project respond?Unresolved payment discrepancy
- A vendor change order is much higher than expected. How should we review it?Unexplained change pricing
- How do we manage changes in a fixed-price contract?Commercial change boundary