Stewart Bohrer, Vice President of Operations at SPM.
When a project loses money, the first finger always seems to point at the estimate. The estimator missed something, the bid was too low, the numbers were wrong from day one. It's the easiest story to tell, mainly because the estimate is the only real number anyone has to point to in the end.
But it’s also usually the wrong story.
Just ask Stewart Bohrer, VP of Operations at SPM. Stewart has a knack for seeing past the budget in a way that connects what is actually happening on site to what the math is telling you in the back office. It’s a skill he picked up while working in prefab, where justifying shop work meant studying how long something took to build there versus on the job site. Once real hours and real crews entered the math, the line between operations and finance disappeared. So what Stewart sees now, walking into contractor after contractor, is that the money rarely disappears in the bid.
It disappears in everything that happens after it.
Lost in Translation
The first major leak happens before any shovel ever hits the dirt. Estimates are often built by spec section or discipline, logical to the way preconstruction works through the documents. The field, however, runs by operation. By schedule. So someone has to tear the estimate apart and rebuild it into a budget the crews can actually use.
Anyone who has run that conforming step knows what it costs. Painstaking hours of rework, plus a slow drift between what was bid and what is now being tracked.
By the time the job starts, the plan the company won with and the plan it is running are two distinctly different number breakdowns. Nobody can compare them cleanly, so nobody does.
Stewart, though, has a pretty simple answer. His recommendation is always to build estimates the way the work will actually be performed. But rather than overhauling a client's entire estimating process, his team works to change things as little as possible and adds a converter that flows the estimate straight into the budget. Same plan from bid to closeout.
The ol’ cliche of "Plan your work and work your plan" only works if the plan survives the handoff.
Broken Feedback Loops
Every estimate is essentially a prediction, and our ability to predict can only get better with feedback. That’s why, on larger projects, Stewart implements the best practice of comparing actuals against the estimate monthly (at minimum), cost code by cost code. It’s classic earned value, what was earned versus what was burned.
But that comparison is only as good as what the field puts into it.
If you get in the habit of throwing hours into "miscellaneous labor," the overrun shows up and the lesson disappears. Stewart even has a simple example to clarify. A foreman out on site who knows it took three extra days to install sewer pipe holds the keys to the most valuable piece of financial information on the project, whether or not the timecard captured it. If those three hours never reach the sewer cost code, the next estimate carries a blind spot while the next loss gets blamed on the estimator. Again.
The thing is, the estimate didn't fail. It just was never told what actually happened.
The Silent Company Killer
The worst part of all of it is a job can be estimated perfectly, coded correctly and built on budget and still lose money. That’s because when it comes to construction, costs come first and payments come later. Sometimes much later. Without a billing strategy that stays ahead of costs, the gap gets covered by a line of credit at best, or the contractor quietly runs out of money entirely.
The math is brutal. A job that’s bid with a five percent margin gets stuck carrying three percent interest to cover misaligned cash flow. All of a sudden, that just became a two percent job.
Nothing in the estimate changed. The margin was there on bid day, but the billing strategy handed it to the lender.
And collections make it worse, because chasing payment is a confrontational conversation most people would rather avoid. Upstream, whoever is paying will settle first with whoever asks most often. The squeaky wheel still gets the grease, and polite patience still gets financed at interest.
Yet many trudge on in optimism. We'll make it up next week, we'll catch the production, we'll finish strong. Sure, that hard optimism can get some hard projects built, but optimism in a poor financial plan is just unmitigated risk with a positive attitude. Strong backlog or not, growth has a tendency to eat cash. Often the next project's costs are already off and running while collections from the last one are still trickling in.
The challenge is, most owners are builders first. They’re great at the craft they chose to learn. Nobody taught them the finance side, yet somehow everyone expects them to know it, so blaming the bid feels safer than admitting the books are a mystery. At the end of the day, even more dashboards won't fix that.
It takes stepping back and admitting we all may need a little help from time to time.
Fix What Happens After the Bid
Luckily, Stewart has come to specialize in offering exactly that kind of help. But he’s quick to say that starting from scratch and re-estimating everything is not the answer. Instead, the answer is closing the gaps after the bid with two easy moves that anyone could make this week.
As an owner of a construction company (or CFO), block one hour for a cash flow forecast covering the next six weeks.
Start simple with what’s in the account today.
List who is supposed to pay, how much, and when, including anyone already late.
Then list what goes out: rent, utilities, office staff, field payroll, materials, and every payable coming due.
Find the gaps, and decide which payables can wait until a collection lands so the line of credit stays untouched.
For the superintendent, foreman or even engineer out running the work, block a few minutes at the end of the day for feedback.
Code the field’s time honestly.
Track the tasks the crew actually performed against the codes the estimate was built on.
When something runs long, say so, with specifics.
Have the conversation that turns the next estimate from a guess into a lesson.
And for everyone, the next time a job goes sideways, resist the urge to blame the bid. Look at the handoff, the timecard and the billing first. More often than not, the estimate was never the problem in the first place.
It was merely the only part of the job anyone actually took a moment to plan.
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