The project cost exceeded the required budget

An angel shared with us his current project, after the consultant requested prices from the contractors, both the owner and the consultant were surprised that the project's price exceeded the agreed budget by a large amount, and it was no longer possible to execute the project without redesigning it and reducing its value.

Here, the consultant demanded redesign fees from the owner, based on the fact that he fully met the owner's needs in the approved design. In return, the owner fully held the consultant responsible as he repeatedly clarified the available budget and because the project's price exceeded the required amount, this was considered a misjudgment by the consultant.

The question here is who is responsible and how can we avoid repeating this very common issue?

The budget is often informally agreed upon between the owner and the consultant in the first meeting after the contract, then it is put on the shelf until the day of opening the tender bids, and the result is either positive or a surprise for the owner.

Based on this, we asked the owner the following questions, and when answered, it will be clear to him and the consultant who is responsible for redesigning:

- Have the received prices been reviewed and verified for accuracy?

- Has the budget been written in a document, email, or any documented reference at the beginning of the design?

- Has the consultant previously informed the owner that his current requests would lead to exceeding the budget during the design phase?

- If we look at the time period between the start of the design and the tendering process, has the construction price increased in the market? And does the percentage of increase justify the project's price exceeding the agreed budget or not?

When answering the above questions, it became clear to us that the owner insisted on increases in the area during the design phase, but the consultant did not refuse and officially confirm to the owner the previous agreement to exceed the agreed budget, an amendment to the current design was agreed upon without any additional fees to be borne by the owner.