Whose Fault Is a Cost Overrun? Reacting to Your Comments on a $25M Estimating vs. Engineering Mistake
Whose fault is a cost overrun when the estimate matched the drawings, but the drawings didn’t match the owner’s real engineering spec? On this episode of Construction Hot Takes, Adam Cooper reacts live to viewer comments on a project he ran almost 25 years ago, a $25 million design-build overrun that added two years to an automotive supplier plant, and takes direct aim at who the internet wants to blame for it.
The story: Adam’s design-build team met every requirement in the construction spec…stainless steel, clean-room conditions, the right conduit — but missed a separate engineering spec the owner used to fail the plant during startup. Adam’s own engineering department had signed off on that spec themselves, then bought sensors and materials that didn’t meet it. When the paint-cure ovens couldn’t hold temperature long enough to cure properly, the crew had to cut the ovens apart and physically lengthen them to fix it.
In this episode, Adam answers your toughest comments head-on: how a mismatch like this slips past submittals, where the owner’s team was during construction, and why he’s defending the estimator everyone online wants to blame, because the engineering manager and head engineer, not the estimator, were the ones who lost their jobs.
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In This Episode
The project had two separate spec books — a construction spec and an engineering spec — and the plant only failed inspection against the second one.
Adam’s own engineering department had initialed the engineering spec themselves, then ordered sensors and materials that didn’t meet it.
When the paint-cure ovens couldn’t hold temperature long enough, the crew had to cut them apart and physically lengthen them to fix the defect.
The mismatch added about two years and $25 million to a project originally scheduled for 18 months.
The engineering manager and head engineer lost their jobs over the project — not the estimator, who Adam argues only priced what engineering designed.
“I really think the estimators probably estimated what the engineers drew, and that’s what they based their estimate on. I’ll defend the estimator in this case.”
Whose fault is a cost overrun on a design-build project?
On a design-build project, responsibility usually traces back to whoever controlled the design, not the estimator who priced it. In this $25 million overrun, Adam Cooper argues the estimator priced what the engineering department designed, so the design decision — not the price — was the real point of failure.
What’s the difference between a construction spec and an engineering spec?
A construction spec covers how something is physically built, like materials and conduit type. An engineering spec covers performance requirements, like how long a paint-curing oven has to hold temperature. This project met its construction spec but missed the engineering spec the owner used to fail the plant.
Can a company be held responsible for an engineering mistake a different department made?
Yes. Even if one department made the error, the company as a whole is still liable for it. On this project, Adam’s own engineering team ordered materials that didn’t meet the engineering spec its own managers had signed off on, and it cost the company $25 million.
How much extra time and money did the spec book mismatch cost?
The mismatch cost about $25 million and added roughly two years to a project originally scheduled for 18 months. It also forced the crew to cut apart and physically lengthen the paint-cure ovens after testing revealed they couldn’t hold temperature long enough to properly cure the paint.
Who typically loses their job after a major construction cost overrun?
On this project, it was the engineering manager and the head engineer who lost their jobs, not the estimator. Adam argues that’s the right call, since the estimator priced the design as drawn, while the design itself is what failed to meet the owner’s engineering spec.
Want a Second Set of Eyes on Your Specs Before You Break Ground?
If your estimating and engineering teams haven’t cross-checked their specs against each other on a project this size, that’s exactly the kind of review Ascent Consulting helps owners and GCs run — before a mismatch turns into a multi-million-dollar mistake.
About the Hosts
Adam Cooper — President & CEO, Ascent Consulting
Adam Cooper is President & CEO of Ascent Consulting and the author of Build It Better. He spent over 30 years in commercial and industrial construction — including as a project manager on design-build projects like the one in this episode — before founding Ascent in 2014.
Could a Spec Mismatch Be Hiding in Your Next Project?
If your estimating and engineering teams are working off different specs — or nobody’s checking that they match before you break ground — that’s exactly the kind of gap Ascent Consulting helps construction owners and project leaders close, before it costs millions instead of thousands.
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Episode Transcript
[0:05] Adam: I’ll defend the estimator in this case. The engineering manager and the head engineer lost their jobs over this project.
[0:11] Jeff: On this episode of Construction Hot Takes Podcast, we’re going to be reading and responding to your comments from LinkedIn, YouTube, and TikTok as well. We’ve got some really spicy comments we’re looking forward to getting into.
[0:24] Adam: I was working as a project manager on a project here in Georgia. This is almost 25 years ago. So we’ll leave the names off of this one, just to protect the guilty. I got brought in to run this project, and we built this tier-one supplier plant. We started getting punch-listed by the engineering team for the owners of this factory, and they started saying our equipment didn’t meet specifications — specifications we’d never even heard of. We’re like, ‘What is this standard? It’s built to the construction specs.’ And they said, ‘No, there’s an engineering spec book. There’s a different spec book.’ I said, ‘Could I have a copy?’ I started printing it out on the copier in the trailer — literally hundreds of pages. The beauty of it is that this engineering spec book was literally initialed by the president and the engineering manager of my company.
[1:14] Adam: And then they had blatantly gone and not designed the system, and ordered materials and sensors that met the engineering spec they’d signed off on. So we built the whole plant to an inferior spec. The whole thing took an extra two years and cost $25 million. I got paid.
[1:32] Jeff: Sure. Yeah.
[1:33] Adam: But my company lost $25 million on that. It cost twice as much to build, and that budget got blown because somebody in engineering/estimating didn’t do the job they were supposed to do and didn’t follow a spec book.
[1:45] Jeff: Okay. That was an older video. I remember doing that.
[1:48] Adam: Yeah. That was probably six months ago
[1:49] Jeff: — you were in your long hair phase.
[1:51] Adam: Yeah, that was my winter cut.
[1:52] Jeff: Okay, we’re gonna read a couple of comments from that video.
[1:57] Adam: Okay, all right.
[1:58] Jeff: And we’re gonna react a little bit.
[2:01] Adam: Okay, I’ll do my best.
[2:03] Jeff: So the first one is: how did this not get caught in submittals?
[2:09] Adam: It’s a great question. I don’t know — this was 25 years ago.
[2:16] Jeff: Sure.
[2:16] Adam: Right, this was the early 2000s — we’re talking about 2003, literally 23 years ago. I don’t even know if there were submittals. We were the general contractor, and we were design-build, so our engineering department bought all the materials — the pressure sensors, the flow sensors — and shipped it all down. So part of the problem was that the sensors they bought didn’t meet the owner’s specification, which was the engineering spec. But I don’t know if the owner ever required us to send in submittals — I don’t recall there being a submittal book or anything like that 25 years ago.
[2:55] Adam: The second thing is there was a performance spec. This was a supplier plant for automotive, so it was painting things like a bumper. The bumper had to go into a cure oven based on the paint we were using, and it had to hold a certain temperature for a certain period of time.
[3:11] Jeff: Yep.
[3:12] Adam: To cure the paint adequately. And when they ran parts through this oven, it didn’t get up to temperature and hold it long enough to cure the paint sufficiently — the oven dwell time wasn’t long enough, and we couldn’t slow down the conveyor to give it more dwell time, because that would’ve affected the production rate.
[3:31] Adam: So we wound up having to extend the ovens. We had to cut the oven apart and put new sections in to make them longer and give us more dwell time — these were a down-and-back type of oven, where the parts would go up and down and back through the oven before coming back down to the ground floor. So we had to cut these and extend these ovens out to get more dwell time and meet the performance spec.
[3:52] Adam: So there were these two specs. The construction spec we had was things like: this has to be stainless steel, this has to be a clean-room environment, this has to run in 3/4-inch conduit, you can’t use any silicone sealants because it’ll affect the paint. We met the construction spec — that was the spec we built to — but the engineering and design specifications weren’t part of our purview. We assumed the engineering department had done their job…
[4:23] Jeff: right?
[4:24] Adam: And it turns out they didn’t.
[4:25] Jeff: So there’s a couple more comments — some may require your response, maybe not, but I think they’re good.
[4:31] Adam: All right, these will be fun.
[4:31] Jeff: So you’re telling me that on a project of this scale — obviously very large — no one from the owner’s consultant side was paying attention until the very end?
[4:43] Jeff: Apparently not.
[4:44] Adam: Yeah, I mean, they were out there looking at our construction. I’d say for the first — it was an 18-month project originally — for the first six to eight months, there were only a handful of people from the owner’s side on the job site, because it wasn’t built yet; they didn’t have a trailer. Once we had the office area built, they moved in, and then they had an engineering manager and a facilities manager who started punch-listing the job. As we got areas completed, we’d ask them to come do an owner’s punch, and that’s where they’d find construction punch-list items.
[5:22] Adam: At some point they pulled out the engineering spec, once we started turning systems on — charging things with water, running the washers, turning on the ovens, getting the robots moving. That’s when they started pulling out the engineering spec and saying this isn’t meeting the engineering criteria, this isn’t meeting the performance criteria. And it turned into a whole new punch list.
[5:43] Jeff: Sure. Of course it did.
[5:44] Adam: That was when everything went to hell.
[5:46] Jeff: Yeah, so this is my favorite one — you may or may not have a response to this: it’s always the estimator’s fault.
[5:56] Jeff: I don’t know if an estimator wrote that or a project manager wrote that.
[5:59] Adam: Probably the project manager who wrote that.
[6:01] Adam: In this case, because we were a design-build firm, the engineers and the estimators worked hand in hand — they were kind of joined at the hip. ‘Hey, this is what I’m designing, I need you to price this up and estimate it.’ And we did a lot of self-performed sheet metal, and our subs were getting the steel shop drawings and the electrical drawings and things like that.
[6:28] Adam: So I don’t know how much of this I’d put on the estimator. I really think the estimators probably estimated what the engineers drew, and that’s what they based their estimate on. So I’ll defend the estimator in this case,
[6:43] Jeff: right?
[6:44] Adam: The engineering manager and the head engineer lost their jobs over this project.
[6:50] Jeff: Stands to reason.
[6:51] Adam: Yeah, it might’ve been the last job that engineering manager had — I can’t remember exactly. The weird part is it’s not like we’d never built these before; this was our bread-and-butter kind of project. It was just weird.
[7:03] Jeff: So that does it for this episode. Thanks very much for watching. Please like and subscribe — you can find us wherever you get your podcasts. See you next time.
[7:13] Outro: Let’s go. Built for builders, born from construction. Welcome to the podcast called: Construction hot takes. Construction hot takes!
