Small misses accumulate
A single variance may be harmless. Repeated labor misses, buyout gaps, unpriced scope growth, and weak change conversion can compound into a material margin shift.
The forecast stops explaining reality
When actual results repeatedly surprise the EAC, the issue is often not just performance—it is the quality of the assumptions governing remaining cost and revenue.
Commercial activity falls behind field activity
Work can move faster than notices, pricing, approvals, billing, and collections. That lag converts execution speed into commercial exposure.
Management sees the problem late
Margin erosion becomes harder to recover when the first clear signal arrives after major scope is complete, key people demobilize, or documentation has gone stale.
Use trend, not one snapshot
Review contract position, cost, changes, billing, and forecast movement over time. The direction of travel often matters as much as the current percentage.