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Direct cost of rework as a share of total construction cost, in a study of 359 projects from the CII database.
Hwang et al., Journal of Construction Engineering and Management, 2009Rework and margin
How much of your project margin goes to rework?
Enter one project's contract value, your planned profit and how rework usually lands on your jobs. You will see how much of that profit goes to rework caused by outdated drawings, missed answers and miscommunication, and what that adds up to across a year.
This project
Lost to information rework
Of planned profit
Across a year
Rework eating into your margin
Cumulative cost of information rework across construction, against your planned profit.
Rework cost
Planned profit
Tighter process
Per $1M of contractInformation rework you absorb
Each point of rework
Each month of delayIn general conditions
Margin left
Where the rework money goes
This project's rework, split by who pays and what is counted against your margin.
What one source of truth for drawings and decisions is worth
Cut the rework that comes from outdated drawings, missed answers and miscommunication.
Contract value, profit, the share you absorb and rework from other causes stay as entered. The dashed line on the chart shows this case.
Industry data
Why rework hits contractor margins so hard
Published figures from the Construction Industry Institute (CII), Navigant Construction Forum, the Associated General Contractors of America (AGC), the Construction Financial Management Association (CFMA) and FMI. Each links to its source.
Indirect cost added on top of direct rework, taking the total to about 10% of contract value with about 10% schedule growth, in Navigant's 2012 rework study.
Navigant Construction Forum, via the American Society of Concrete Contractors (ASCC)Share of rework on US jobsites that about 600 construction leaders traced to miscommunication and poor project data. The survey was commissioned by PlanGrid, a software vendor.
FMI and PlanGrid, 2018Average gross profit margin for general contractors in CFMA's 2024 benchmarks. A construction accounting firm puts net margins for well-run firms at 5% to 8%.
Johnson, Miller & Co., citing CFMAFirms with at least one project delayed by worker shortages in 2025. Rework spends craft hours that are already hard to find, in a survey of 1,342 respondents.
AGC 2025 Workforce SurveyRequests for information (RFIs) on an average project in Navigant's study of 1,362 projects, at about 8 hours and $1,080 each to review and answer.
Navigant Construction Forum, via ASCCHow this is calculated
Direct rework is the contract value times the rework share. The part caused by information problems is that times the information share, and your firm's part is that times the share you absorb. Indirect cost adds the indirect ratio on top. That total is what counts against your planned profit.
Rework from other causes, and information rework that trades or the owner pay for, appear in the breakdown for context but are not counted in the result.
The chart spreads the cost across construction the way rework usually lands: light at the start, peaking in the middle and staying high through the later trades and finishes. The year view multiplies one project by the number of similar projects you run.
The 5% rework share comes from a CII-based study and the 80% indirect ratio from Navigant. The contract value, profit, duration, information share, the share you absorb, general conditions and the project count are illustrative, so replace them with your own. The 40% information share is set below the 48% that the FMI survey reported.
The result is a planning estimate for one project. It is not accounting or legal advice.
Glossary
Terms used on this page
Plain definitions of the construction terms, money measures and sources above.
On the job
- Change order
- A signed change to the construction contract that adjusts scope, cost or schedule.
- General conditions
- The contractor's cost of running the job over time: project team, site office, temporary facilities, equipment and insurance.
- Request for information (RFI)
- A formal question to the design team asking it to clarify the drawings, specifications or design intent.
- Re-sequencing
- Reordering work and trades to get around a problem, which usually costs productivity.
- Revision
- A new issued version of a drawing or document, numbered so everyone knows which one is current.
- Rework
- Work done again because it was built wrong, built from the wrong information or changed after it was built.
- Single source of truth
- One shared place where the current drawings, models, decisions and records live for the owner, design team and every trade.
Money
- Direct cost of rework
- The labor, material and equipment spent tearing out and redoing the work.
- Gross profit margin
- Revenue minus the direct cost of the work, as a share of revenue, before company overhead.
- Indirect cost of rework
- The knock-on cost: delay, extra supervision, re-sequencing and lost productivity on other work.
- Planned profit
- The profit, or fee, you expect to keep on this project, as a share of contract value.
Organizations and studies
- Associated General Contractors of America (AGC)
- The US trade association for construction contractors, which runs an annual workforce survey.
- Construction Financial Management Association (CFMA)
- A US association of construction finance professionals that publishes annual financial benchmarks.
- Construction Industry Institute (CII)
- A research consortium at the University of Texas at Austin that collects project performance data.
- FMI
- A management consulting firm for the construction industry.
- Navigant Construction Forum
- The construction research group of the consultancy Navigant, which studied rework and RFIs.