How Should an Owner Read a GC's Cost Report?

On a lump-sum job the owner pays a fixed price and the GC's costs are its own business. On a guaranteed maximum price or cost-plus job the owner pays the GC's actual cost plus a fee, so the contract usually gives the owner an open book: a monthly cost report showing what was budgeted, what is committed and spent, and where each line is projected to finish. See what a GMP contract is.

The number that matters is the projected final cost, not the cost to date. GAO's cost guide defines the estimate at completion as "the latest revised estimate of cost at completion including estimated overruns and underruns for all authorized work", and notes that contractors are often asked for "three EACs – a best case, a worst case, and a most likely case" (GAO-20-195G). Asking your GC for a range is a fair request.

1. Check that the current budget adds up to the current contract sum: the original plus executed owner change orders.
2. Read every contingency transfer since last month: what it paid for, and whether it was really a change in scope the owner should have priced.
3. Compare contingency used and spoken for with percent complete. Using two-thirds of it a little over halfway through is a warning.
4. Read the lines projected over budget, largest first, and ask what caused each one and what is pending on it.
5. Check time-based lines, like general conditions, against the current schedule: a later finish should raise them.
6. Tie cost to date to the pay applications you have approved.
7. Ask for the best, worst and most likely projected final if the report shows only one.

Keep two contingencies apart. The GC's contingency sits inside the GMP for the GC's risks. Your own owner's contingency sits outside it; GSA's policy says scope-change costs "must be accommodated by approved revisions to the project funding and not through the use of construction contingency" (GSA P-120). Sizing your own is covered in how much contingency an owner should carry, and the difference between the two terms in allowance vs contingency.

The project is fictional: an $8,400,000 GMP for a three-story office, 60% complete in month nine. The GMP was built as $7,350,000 cost of the work, $480,000 general conditions, $220,000 GC contingency and a $350,000 fee. No owner change orders yet; $148,000 of contingency has been moved into cost lines.

The current budget still adds up: $7,498,000 + $480,000 + $72,000 + $350,000 = $8,400,000, and the transfers net to zero. The lines project $57,000 over ($32,000 + $25,000). If the remaining $72,000 of contingency absorbs that, the projected total is $8,457,000 − $57,000 = $8,400,000 with $15,000 of contingency left: inside the GMP, but only just.

Read against progress, $148,000 used plus $57,000 projected is $205,000, or 93% of the $220,000 contingency, at 60% complete. The general conditions overrun points to a later finish. Questions for the GC: what the $148,000 of transfers paid for, which cost lines carry the $32,000, how many weeks the $25,000 reflects, and what happens above the GMP. On most GMP contracts the GC bears cost above it, but your contract decides that.

• Projected final equal to the budget on every line, month after month: nobody is forecasting.
• Contingency transfers with no description.
• Owner-requested scope paid from the GC's contingency instead of a change order.
• General conditions not moving after the schedule has slipped.
• Cost to date that does not tie to the pay applications.
• Buyout savings reported on signed trades while unbought trades still carry their original numbers.

The pay applications behind cost to date are covered in how to review a GC's pay application, and changes in how to review a change order as an owner. The rest of the owner's path is in the owner's guide.

In Conflo the cost budget is the general contractor's own tool: owners, subcontractors and designers cannot open it, so a cost report on an open-book job is something the GC shares with you. What the owner sees directly is the money that reaches the contract. The GC's pay app shows its payment steps, the application summary with the net change by change orders, retainage and current payment due, and the schedule of values line by line with this period, stored and to-date amounts.

A change order waiting on the owner shows its price, any days added to the schedule, what the contract becomes, and its line items at the owner's price, with Approve and Reject.

A cost report is worth reading for three numbers: whether the lines still add up to the contract, how much contingency is left against how far along the job is, and the projected final.

Read the lines projected over and ask for causes, not totals. The month you ask is the month the GC can still recover.

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1. GAO-20-195G, Cost Estimating and Assessment Guide (March 2020) — U.S. Government Accountability Office. Read October 22, 2026.
2. P-120, Public Buildings Service Cost and Schedule Management Policy Requirements (PBS 1000.6B, November 7, 2022) — U.S. General Services Administration (via WBDG). Read October 22, 2026.