Bidding on a megaproject? Here are some considerations

By Dani Sheehan. 

Managing a construction megaproject requires strong leadership, skilled labor and the right software solutions to handle the complexities of budgeting, resource management and risk mitigation. 

Construction megaprojects, defined as large-scale, federally funded projects of $35 million or more, present exciting opportunities for contractors. Offering high earning potential, long-term work stability and portfolio advancement, these projects can set you apart in the industry.  

However, they come with significant risks, including potential delays, budget overruns and cash flow challenges. Before you try to win the bid on one of these projects, understanding the complexities and leveraging the right tools is critical – and potentially the difference between a profitable project and a financial strain. 

According to McKinsey research firm, only one out of every ten megaprojects are delivered on time and within budget, while 77% of those late projects are late by at least 40%.  

Before diving into a construction megaproject, you’ll want to carefully evaluate several critical factors. First, thoroughly review the project’s scope, including contract specifications, timelines and performance guarantees to ensure your company’s structure can handle the demands. Cash flow management is equally important; these large-scale projects often require significant upfront costs and can strain resources if not properly forecasted. Investing in the right subcontractors and tracking expenses closely can help prevent bottlenecks. Finally, be prepared with a strong risk management strategy to mitigate potential delays and cost overruns. 

How construction accounting software can help 

Managing a construction megaproject requires strong leadership and skilled labor, but it also requires successful project and financial management. Investing in construction accounting software provides a solution for handling the complexities of budgeting, compliance and resource management needed to complete the project. Construction accounting software provides these essential capabilities: 

Enhanced job costing  

Accurately tracking every expense, including labor, materials, permits and more is crucial to a successful job, no matter how large. Software solutions enable contractors to maintain precise control over their budgets, avoiding cost overruns and identifying discrepancies quickly before they become a problem. 

Streamlined project management  

Construction accounting software centralizes all financial data, budgets and invoices to help you keep track of all the moving parts and maintain visibility on the project’s financial health.  

Risk mitigation  

When you identify issues in the budget early, you can take proactive measures to avoid falling further behind. Automated accounts payables and receivables in accounting software optimizes cash flow and streamlines financial reporting, giving you better financial control. 

Comprehensive reporting  

Government-funded projects often come with strict reporting requirements, including certified payroll, labor compliance and environmental reports. Construction accounting software automates these processes, ensuring timely submission and reducing the risk of compliance penalties. 

Your construction accounting software solution 

FOUNDATION® construction accounting software is specifically designed to help contractors handle the complexities of megaprojects. It offers enhanced job costing, robust project management features and comprehensive reporting capabilities to ensure government compliance. With FOUNDATION, contractors can streamline their operations, stay on budget and mitigate financial risks with ease. 

If you’re ready to take on your next big project with confidence, FOUNDATION’s construction accounting software provides everything you need to manage your megaproject successfully.