Fourteen Ways to 20%
(download Fourteen Ways to 20%.pdf)

Any project can be successful in terms of quality, schedule and budget. Quality and performance have to be achieved no matter how long the punchlist is, or how many times the contractors have to come back during the warrantee period to make sure the project performance is achieved. And so all members of the team are motivated to do it right the first time.

With regard to schedule, excellent project management and field supervision are the keys. This starts with the planning, continues through the review of the documents and providing constructability input, is fostered in the procurement stages, and is actualized in the submittal and construction stages. It also requires discipline to minimize changes through the course of the project after the documents are issued.

Without measurably impacting the quality or performance of the project and the schedule then, there are seven ways to save up to 10% of the construction cost, and seven ways to spend 10% or more than is necessary, and therefore how to avoid incurring the poor results.

Seven ways to Save:

1. Design to Target: This can only really occur when there is a consultant or contractor that can provide comprehensive cost estimating early in the design process.

2. Value Engineering: Evaluating every component and system - Research applicable products and systems and evaluate compared to value received.

3. Constructability Review: To insure simplification, minimum number of interfacing trades, and well coordinated details.

4. Reducing the duration of construction: Doing the hard work of finding the ways to do this. Because faster construction approaches are also lower cost.

5. Specialty Systems Design Build (based on performance criteria) particularly for HVAC, fire protection, electrical, and specialty electrical systems.

6. Encouraging Voluntary Alternates: Based on local products and expertise, the subcontractors and vendors pursuing the project will offer the last line of cost savings for the project if it is encouraged.

7. Selecting consultants and contractors with proven performance in delivering sound and financial prudent solutions, together with commitment to the project to deliver the greatest value.

Seven ways to Spend more than is necessary…and how to avoid:

1. Change Orders: The cost of the changed work is always higher than that included in the base documents, but worse than that, they have an adverse impact on the rest of the project.

2. Constructing the Building Frame and Enclosure in winter (in northern states or during the rainy season in southern states)

3. Complicated Structural Designs and Layout generate more cost than they provide value in most cases. Organic or curvilinear design of permanent building assemblies that always generate higher costs.

4. Proprietary Manufacturer Specification and/or sole sourcing components and systems without agreed upon cost basis (allowing manufacturer rep prepare spec), increase costs in most cases.

5. Large building committee without clear leader or one that delays decisions creates a drag of the project.

6. Hiring vendors on a time and material basis.

7. Accelerating the work using overtime.

There are some specific pitfalls for these types of projects:

1. Churches:

1. Allowing Ministry Department Leaders to orchestrate the consultant selection.

2. Failing to clearly define scope, performance and budget criteria with affected Ministry Leaders.

3. Allowing Interiors Committee or ministry departmental people to purchase finishes, equipment and specialties (Note: If they are responsible for purchasing, obtain a written agreement as to the scope and the budget amount that can not be exceeded).

4. Lack of accountability for budget and schedule and/or capable leader over the volunteer work force.

2. Offices:

1. Implementation of systems and infrastructure (generator, special HVAC systems, technology, security, life safety, etc.) impacted by the tenant or department program.

2. Coordination of the office furniture plans and technology with the building core and more permanent office scopes of work.

3. Medical:

1. Coordination of the medical equipment and furnishings with the building systems

2. Coordination of specialty mechanical and electrical systems.

3. Quality of thin floor covering materials, and durability during the phasing in of occupancy

Other ways to insure that value and costs are balanced, and that the overall project budget is not exceeded:

1. One person or organization is responsible for the entire project budget – someone who has the experience and the reporting tools to measure all costs against budget throughout the project.

2. Manage the Contingency - Establish limitations on the uses of the contingency through various stages of the project, and make sure that the contingency is not used for discretionary scope increases, until after the building is enclosed. Also make sure that 50% of the contingency is unused at 75% completion of the project.

3. Always say no to departmental requests for changes at least twice before considering the request seriously. Ask the questions: If we didn’t build this request into the current project, what would be the worst thing that would happen? And, could this be incorporated into the project at a later date without significantly disrupting ongoing operation? Any approved requests should be accompanied with a cost/benefit analysis with significant return on investment.

4. Require periodic accounting and projection of the commitments and remaining scope to be procured against the budget.