What is maverick spend in construction?

What it actually costs

The honest answer is: forfeited negotiated savings. When spend goes off-contract, the rates you spent months negotiating simply do not get used — Hackett puts the leakage at 10 to 20% of those savings.

You will see vendors quote a headline “premium” that off-PO purchases supposedly attract. We are not going to, because no clean, neutral figure for it exists. The savings you negotiated and then did not use is a real, measurable cost. An invented premium is not, and quoting one would undermine the argument it was meant to support.

And the cost that is not in money

The commitment never entered the cost report, so the liability was invisible until the invoice landed. The price was never agreed, so it is now whatever the supplier says it is. And there is no purchase order for the invoice to match against, which means the accounts payable team has an argument rather than a transaction.

That is the part that hurts on a project running 3–5% margins: not the unit price, but the fact that nobody knew the money was gone.

The fix is speed, not policing

Every organisation that has tried to solve this with a memo has failed, and the reason is not moral. It is arithmetic. If raising a proper purchase order takes longer than a phone call plus a favour, the phone call wins — every time, on every site, whatever the procedure says.

So the process has to make the disciplined path the fast path. An emergency PO that can be issued in ten minutes beats a verbal order comfortably. One that takes two days does not, and no amount of policy will change that.

Terms

• Maverick Spend