Where Construction Margin Actually Goes: 7 Causes of Fee Erosion to Watch Out for in 2026

The post-award fee erosion that no one’s tracking… and why it’s costing contractors more than they realize. Based on analysis of contract review workflows across top ENR-listed contractors

Most organizations don’t lose margin because they miss dramatic risks. They lose it because routine risks are accepted by default and the intelligence teams already have never makes it to the field in time to matter.

Across dozens of projects, we observed the same pattern:

• Contract risks are identified under time pressure
• Negotiation leverage disappears quickly after award
• Operational teams begin work without clear guidance on how to comply

By the time issues surface, options are limited — and margin erosion is already locked in.

What You’ll Learn in the Report

This report breaks down:

• The 7 most common sources of fee erosion
• Why these issues consistently surface after leverage is gone
• How capacity constraints distort contract review decisions
• Why risk summaries fail to protect margin in execution
• What leading contractors are doing differently to close the gap

Download the complete analysis of where margin actually goes post-award and what leading contractors are now doing differently.