Unit-rate estimating was designed to price quantities, not to manage resources, productivity, or system efficiency.

Yet most bid evaluations still rely on unit measures as if they reflect how work is actually executed in constrained, multi-interface environments. They don’t.

Unit measures assume:

• Linear productivity

• Stable access and sequencing

• No congestion losses

• Perfect trade handoffs

• Identical project complexity

None of those conditions exist on real projects.

The result is predictable: bids look mathematically sound while hiding massive inefficiency risk inside people and supervision.

Nowhere is this more visible than in PMT loading.

Vendors routinely percentage-load PMT because “every project needs management.”

10%. 12%. 15%. 20%

Applied mechanically, regardless of:

• Resource density

• Trade stacking

• Interface complexity

• Physical congestion

• Shift strategy

• Actual level of effort required

Percentage logic creates excessive overhead that is disconnected from operational reality.

It inflates project cost without improving delivery performance.

In practice, this PMT padding becomes contingency by another name.

Unused overhead gets converted into margin.

When pressure appears, change orders monetize the same risk twice.

The owner pays for inefficiency whether the risk materializes or not.

Here’s the uncomfortable question:

Why is the owner transferring contingency control to vendors who are financially incentivized to monetize it?

Owners would never allow vendors to hold material contingency budgets without controls.

We track materials obsessively: quantities, wastage, damage, delivery windows, and storage.

But we hand over labor and management contingency with almost no governance.

That is backwards.

If labor represents the largest controllable cost on a project, then:

• Resource utilization should be modeled explicitly

• PMT should be justified by level of effort, not percentage folklore

• Contingency should be owned and governed by the owner, not embedded in vendor pricing

• Bid analysis should challenge resource logic, not just unit rates

Bid evaluation must evolve from:

“Is the price competitive?”

to

“Is the resource strategy executable, efficient, and aligned with system constraints?”

If we don’t challenge bids at the resource level, we will keep paying for invisible waste while believing we negotiated well.

Unit pricing tells you what something costs.

Resource intelligence tells you whether it should cost that much at all.

#BidAnalysis #ProjectControls #ConstructionLeadership #ResourceManagement #OwnerPerspective #CapitalProjects #OperationalExcellence