How to keep costs under control

Delivery systems may vary from one job to another, but all those involved in the construction process can surely agree that one of the most important facets of bringing a project from concept to completion is doing so cost-effectively.

That’s why a growing number of ventures being completed are Design/Build, Construction Management at risk, and Negotiated bid projects. With these delivery systems, projects are monitored from start to finish with a specific budget in mind, helping to reduce risk for the owner and minimizing the delivery schedule because of the overlap between the design process and the building process.

A PREFERENCE FOR DESIGN/BUILD
Take Plant Construction (Construction Digital, June 2010) for example, a contracting and construction management company based in San Francisco well known for its involvement in the restoration of historically significant buildings. Plant offers multiple delivery methods including both Design/Build and Construction management at risk.

“Our preference is that we be part of a team whose goals are aligned and that we be involved as early as possible in the project so that we can influence the part that we are skilled at the cost and the timing and the efficiency of the construction. Any one of the different processes that involve the contractor early and allows the contractor to have a role in the planning of the projects is where we ideally like to be,” says Craig Allison, co-general partner at Plant.

By being part of the process from an early stage through to completion, companies are able to supervise all aspects of the construction. A distinct budget is created early on, and therefore adhered to throughout the progression. Construction Management companies are able to create relationships with clients because of this. Clients trust them to oversee entire projects, not just portions of the project, and come to have confidence in their work results.

Elzinga & Volkers, Inc., (Construction Digital, June 2010) a general contractor based in Western Michigan specializing in the healthcare, senior living and food processing industries, uses a Design/Build method and understands this relationship.

“Many senior living facilities are both physically tired and using antiquated models of delivery. We are working with the industry to satisfy and anticipate the needs of the Silent and Baby Boomer generations,” says Mike Novakoski, President and COO of Elzinga & Volkers, “Nobody has our people – it’s a high quality group that knocks the socks off clients when they develop a relationship with them.”

Other companies understand the value in the Design/Build model as well. TEAM Group (Construction Digital, June 2010) from Euless, TX uses this model and works under the premise that the company and all of its projects function as a team, or a unit.

Andrew K. Bowser, one of the principals of TEAM Group, says: “We build a partnering relationship with subcontractors that will enhance the overall value of the project. We report fairly and equitably, without mark-up, what the costs are to the owner. The owner gets the benefit of everyone’s knowledge and expertise and full knowledge of the costs throughout the project.” By combining all aspects of the design process into one entity, TEAM Group is able to create an end product for the costumer that everyone has supported from the beginning.

ADDITIONAL SYSTEMS & SOFTWARE
Other methods like negotiated bid projects allow projects to be completed in a more timely fashion. When the prospect of opening the doors of a building earlier is more appealing than waiting for a competitive bid to be completed, a negotiated bid can ultimately be a better option for the owner.

Also important to the cost-efficiency of a job is construction project management software. Software such as industry reliable Sage Timberline provides real-time cost data that can help to make profitable decisions about jobs. The status of budgets, contracts, and changes in orders are available through a wide offering of web-based software solutions. The software also is available to give early warning signs for issues like cost overruns and scheduling snags. When the budget goes off track, software allows job overseers to quickly make adjustments to the project.

The oversight of projects is crucial to their success from an economic perspective. By using different delivery systems, building time and budget are able to be decreased, and often client satisfaction is increased. As the economic tide continues to have an impact of the entire construction sector, it is these kinds of cost-combating initiatives that save businesses money.