Redefining Best Practices to Save on the Rising Cost of Construction
Developers are betting big on the market growth of buildings being reimagined, remodeled and built from the ground up all across America. In major metropolitan cities from Chicago to Portland, you can easily spot construction cranes from virtually any block. And while this increased demand is great for our industry as a whole, it is tempered by the unfortunate realities that come from factors like labor shortages and skyrocketing construction costs.
With a finite amount of skilled labor, construction prices are absolutely on the rise. And it's a fact that expensive construction is easy, although it is anything but efficient in an industry where margins matter more and more each year. As these factors continue to evolve, it is imperative that we as an industry similarly adjust. These are the times when we as an industry need to redefine our approach to operations and best practices for controlling the rising cost of construction.
There are any number of ways we can adjust operationally; however, we need to first and foremost commit to three fundamental practices that will eliminate wasteful spending, streamline the construction process from start to finish, and deliver a better outcome for all parties involved. These three components - which we view as redefined best practices - all emphasize the cost savings that can be realized through more strategic timing and collaboration
Early Contractor Involvement
Historically, the project life cycle looks something like this: A client meets with an architect to share their ideas for the project. The architect draws up the necessary blueprints based on the client's aspirations. The blueprints are sent to the contractor who often reviews the plans and provides the client with a bid. If that bid is over budget, the plans go back to the architect who is forced to draw less ambitious plans. This archaic cycle can sometimes happen three to four times on any given project. This costs a client both time and money as each redesign tacks on unplanned - and entirely avoidable - costs.
One of the easiest ways to save on the cost of this project segment is to actively involve your contractor from the start of the project. We call this taking a flat approach as opposed to the circular project life cycle. If you meet with your contractor and architect at the same time, all parties can far more effectively cost check each other and cooperatively consult on the realities of concept vs. implementation. This early contractor involvement allows for instant input on all critical decisions. This eliminates costly back and forth so that the project is far more efficiently managed and stays on time and on budget. If the old process took two months before, early contractor involvement can cut it down to two weeks.
Hire an Owner's Representative
One of the easiest ways to save on costs is to hire an owner's representative before you start your project. This individual will operate in your best interest and help navigate some of the pitfalls that often can send projects into a tailspin. An owner's rep should work with you to clearly identify the initiatives you're trying to achieve. They will help find the architect and contractor and hire the right vendors to meet the desired results.
In most cases, the people chosen to represent the client internally, also have a full time day job. The owner rep streamlines communication from all vendors and assists the end user in efficient decision making. For example, there could be ten decisions that need to be made by the client but only three of them are going to affect construction schedule. The owner's rep acts in the client's best interest to prioritize decision making. The owner rep also creates executive level updates of budget and schedule projections to effectively communicate with C-Suite on progress in an expeditious manner.
Early Subcontractor Involvement
In the same way that a client should bring in a contractor early in the design process, the client should also look to a contractor willing to take early input from their subcontractors, as well. If you're willing to take the manufacturer and designer and put them in the same room, the result is that the project is far more likely to be built in the best way possible. Architects can't always communicate what they're trying to do, so they can sometimes over-design their intentions. Rather than do that, working with the supplier, manufacturer or subcontractor can often produce the most cost-effective way to achieve the intended design effect. Additionally, when you ask for early and ongoing input from the subcontractor, they are that much more willing to go the extra mile to exceed schedule and design expectations. By engaging your trade partners in the process as opposed to giving them orders after the fact, they're far more likely to handle your project with the necessary care and attention it deserves.
Recently our firm was tasked with tackling a project that required a decorative staircase to connect two office floors. With a limited percentage of dollars allocated to this part of the office remodel, we immediately identified that there could be potential issues fulfilling the design requirements. In an effort to get ahead of the problem we called a meeting to get the architects, the structural engineers, the multiple subcontractors, and the steel manufacturer in the same room. With careful consideration from all parties, we were able to not only complete the staircase, but managed to come in 15 percent under budget.
At the end of the day, we can either take the easy way out and address rising costs with expensive construction, or we can disrupt what we now know to be an inefficient process. Early and ongoing collaboration are the critical components of our new best practices.
By Tony Iannessa, President, Builtech Interiors Group, LLC