The late contractor appointment cost penalty on public sector projects reaches an average of 17 per cent above the original client budget when contractors are brought in at RIBA Stage 4, according to a new report from the Centre for Construction Best Practice. The findings, drawn from 412 public sector projects delivered by 55 contractors, give the industry its clearest quantified picture yet of what delayed procurement actually costs.
Robbie Blackhurst, chair of the Centre for Construction Best Practice, authored the report, titled Constructing Certainty, which traces appointment timing across RIBA Plan of Work stages 0 to 4. The pattern is consistent: projects where contractors were appointed at stages 0, 1 or 2 came in below the original client budget. Those appointed at stage 3 saw average cost growth of nearly 9 per cent. At stage 4, that figure more than doubled to 17 per cent.
Why the late contractor appointment cost compounds so sharply
The stage 4 figure is not simply a function of contractors pricing high. By the time a project reaches stage 4, the design is substantially complete. Structural solutions are fixed. The building envelope is decided. Mechanical, electrical and plumbing strategy is locked in. Spatial co-ordination has already happened. The assumption is that this represents certainty: scope is defined, so cost should follow. But, as Blackhurst sets out, certainty of design is not the same as certainty of delivery.
Sequencing, logistics, access constraints, package interfaces and real market capacity are what drive outturn cost. As the report states, ‘A contractor arriving at stage 4 inherits decisions without having shaped any of them.’ Tendering a fixed solution under programme pressure, with limited ability to challenge or optimise the design, is a fundamentally different commercial exercise from developing a cost plan alongside a design as it matures. There is no scope to test buildability, rationalise package interfaces or validate programme assumptions against actual supply chain availability. Risk that cannot be influenced has to be priced in, and tender sums rise accordingly.
The compounding effect comes during delivery. The assumptions embedded in an elevated tender price are then tested against a project never optimised for how it needs to be built. Co-ordination issues that could have been resolved in design surface on site. Sequencing that looks logical on paper proves impractical in reality. The result is costly variations, change orders and delays that push outturn spend beyond even the already elevated tender figure. Stage 4 appointment produces, in Blackhurst’s framing, a transfer of risk without a transfer of control.
A structural problem across public sector procurement
The dataset reveals how deeply embedded late appointment has become. On more than 60 per cent of the projects examined, contractors were appointed at stages 3 or 4. That is not an outlier pattern: it is standard practice across much of the public sector, driven by governance pressures that reward competitive tension at award over realistic cost control through delivery.
The Constructing Certainty report translates this evidence into three asks of government and public sector clients. First, early contractor involvement should be mandated by RIBA Stage 2 as the default for public sector capital projects worth more than £5 million, with defined outputs and governance rather than simply encouraged in guidance. Second, public sector capability to procure and manage early involvement should be strengthened through standard templates and training, making it consistent and auditable rather than dependent on the confidence of individual client teams. Third, mandatory value checks should prevent contracts being awarded on lowest price alone, with whole-life value measures required at approval stages and lowest-price routes restricted on higher-risk schemes.
The Procurement Act 2023 placed greater emphasis on value and procurement outcomes, and the Construction Playbook, Cabinet Office guidance first published in December 2020, pointed in the same direction. The report argues that neither has been sufficient to shift standard practice.
Applied across the UK government’s 10-year, £725 billion infrastructure pipeline, the illustrative difference between early and late contractor appointment is £138 billion. The industry has long argued the case for early contractor involvement on principle. With 412 projects and consistent cost data behind it, the argument now has numbers to match.
