Rework Cost as % of Contract Value
Cost of defective work requiring correction as a percentage of total contract value
What is Rework Cost as % of Contract Value?
Rework cost as a percentage of contract value is the cost of redoing work as a share of the total contract value. It shows how much is lost to fixing mistakes.
Rework eats into margin and delays delivery, so keeping it low protects profit.
How this KPI is measured
- Function
- Operations & Supply Chain
- Sub-function
- Quality
- Industry
- Construction & Engineering
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly
- Formula
- (Cost of rework / Total contract value) × 100
How to calculate it
Divide the cost of rework by total contract value, and multiply by 100.
For example, if rework cost 120,000 on a contract worth 4,000,000, the figure is 3%.
Include labour, materials and delay costs of rework, and record causes such as design changes, errors or poor workmanship.
Where it is used
Protecting margin
See lost profit.
Improving quality management
Target causes.
Comparing projects
Learn from best.
How to improve it
Tips and common mistakes
- Separate client-driven change from mistakes.
- Include hidden costs like delay.
- Share lessons across projects.
More Operations & Supply Chain kpi library
Build better plans, faster
Join the waitlist for early access to curated insights, flexible templates, and rapid iteration across strategy, planning, and project management.