How owners are demanding more transparency from their GCs

Owners are asking general contractors for frequent, verifiable evidence of progress, cost and risk in place of monthly narrative updates that arrive after problems have already grown. Persistent overruns, slow reporting and high financing stakes are pushing developers and owner’s representatives to write documentation standards, reporting cadence and shared data access directly into their contracts.

For developers, investors and owner’s reps across Dallas-Fort Worth, the shift affects how general contractors are selected and how projects are managed from kickoff through turnover. The reasons behind it, and the practical requests that follow, are consistent across private and public work.

Why monthly narratives are losing ground

The frustration is rooted in results. McKinsey’s research on transparency in megaproject execution cites a survey of senior project executives which found that projects overrun their budgets and schedules by 30 to 45 percent on average. McKinsey also found that it can take days or weeks for news of execution delays to filter up through an organization.

Part of the problem is how information is captured. Progress data may be siloed in systems used by many different contractors, or collected in formats that are hard to combine, such as nonstandardized PDF forms or handwritten notes. When an owner receives a report assembled from those sources, the owner is reading a summary of a summary.

Better visibility pays. In one example McKinsey describes, a project control tower helped the team identify, manage and deliver more than $75 million in cost savings over the remaining course of the project.

The cost of late information: A survey of senior project executives cited by McKinsey found that projects overrun their budgets and schedules by 30 to 45 percent on average, and news of delays can take days or weeks to reach decision-makers. (Source: McKinsey & Company, 2023)

Risk reporting has moved up the agenda

Owners are responding by asking for more. KPMG’s 2023 Global Construction Survey findings show that 36 percent of respondents are placing greater emphasis on accurate risk reporting, up from 25 percent in 2021. The same survey found that only half of project owners’ projects are meeting completion deadlines, and 37 percent of respondents said they had missed budget or schedule targets because of a lack of effective risk management.

For owners, the lesson is that a percent-complete figure is only as useful as the evidence behind it. A pay application that reports a floor as largely framed invites questions unless the owner can see the framing.

What owners are asking general contractors to provide

Transparency requests tend to focus on the areas where owners carry the most financial exposure:

• Pay applications supported by evidence that billed work is actually in place.
• Schedule updates tied to progress observed in the field.
• Dated, location-tagged records of concealed work captured before it is covered.
• Direct access to project documentation instead of periodic exports.
• Closeout packages with accurate as-builts, warranties and operating information.

The simplest way to set these expectations is to agree on them at kickoff. A shared construction documentation checklist, attached to the contract or the project execution plan, can spell out what gets captured before slab pours, before walls close, above ceilings and at each inspection, along with who captures it and where it is stored. Documentation then becomes a defined deliverable with clear ownership, which is much easier to enforce than a general promise to keep the owner informed.

Public owners face the same problem

Oversight challenges are not limited to private developers. The GAO’s review of oversight in the Defense Department’s military construction program found that over five years, poor initial planning contributed to about 25 percent of projects being delayed by at least a year. In one case, a building was delayed for more than three years because of design errors and insufficient quality control oversight.

GAO also found that the department does not fully monitor the execution of its military construction program and projects, which included 598 projects under way at the end of fiscal year 2023. The lesson carries over to private work: an owner who cannot see execution clearly learns about problems late, when they cost the most to fix.

Delivery models are shifting toward shared information

Contract structures are changing as well. McKinsey’s analysis of preconstruction excellence and collaborative contracting reports that collaborative contracts lead to a 15 to 18 percent improvement in cost and schedule performance on average compared with the baseline. The same analysis notes that full transparency around cost and schedule assumptions can support trust-based relationships between contractors and owners.

Collaborative models such as progressive design-build and integrated project delivery depend on open books and shared information. Owners who choose them are, in effect, choosing to see cost and progress data as it develops, which raises the documentation bar for every contractor on the team. Owners using conventional lump-sum contracts can borrow the same principle by agreeing in advance on the evidence that will support each monthly pay application.

Transparency at closeout and beyond

The transparency conversation does not end at substantial completion. Owners who will operate a building for decades need an accurate record of what was installed and where, especially for systems concealed in walls, floors and ceilings. When that record is assembled in the final weeks of a project, it tends to miss late changes and hidden work, and the facilities team inherits the consequences.

Owners increasingly ask for the as-built record to be built progressively, with dated captures of concealed work, redlines logged as changes occur and warranties organized by system. For investors who plan to sell or refinance an asset, a complete and verifiable construction record is also easier to hand to a buyer or lender during due diligence.

Questions owners can ask when selecting a GC

Owners and owner’s reps can test a contractor’s approach to transparency before the contract is signed:

• How often is the site documented, and who is responsible for capture?
• Will the owner have direct access to the project record, or only to periodic reports?
• How are pay application quantities verified against work in place?
• How are schedule risks reported, and how quickly after they are identified?
• What will the closeout package include, and when will it be assembled?

Clear answers to these questions say a great deal about how a contractor will behave when a project runs into trouble.

How general contractors can get ahead of the request

General contractors can anticipate these requests with a few practical steps:

• Offer owners read access to the project record from day one.
• Standardize capture frequency and reporting formats across every project.
• Tie each pay application line to visual evidence of work in place.
• Flag schedule risks as soon as field evidence shows them.
• Build closeout records progressively during construction.

Transparency as a selection criterion

Transparency is becoming a condition of doing business with experienced owners in North Texas and beyond. General contractors that treat visibility as part of their service, and document work in a form owners can verify for themselves, will find budget conversations easier, disputes rarer and client relationships longer. For owners, the practical step is to put expectations in writing early: the documentation standard, the reporting frequency, the level of access and the closeout deliverables. For contractors, it is to meet those expectations before being asked.