Controlling construction costs is not rocket science, nor does it involve time travel.
Any real property owner can control construction costs for facilities repair, renovation, maintenance, and new build projects. Consistently delivering quality projects on time and on budget simply requires leadership, accountability, and commitment.
1. Adopt a Program vs. a Project Approach
Sure, every “construction” project is different, however, there are no worm holes or warp speeds involved. EVERY project can broken done into discrete elements called line item construction tasks. Using these granular elements and sharing the associated descriptions, labor, material, and equipement details in a standardized format (CSI MasterFormat) with all project participants within a robust collaborative process is the path to significant cost savings and the mitigation of change orders, disputes, and waste. Integrated Project Delivery (IPD) for major new construction and LEAN Job Order Contracting for repair, renovation, maintenance, and less design intensive new construction are proven programmatic processes that can save 30%-40%+ versus design-bid-build (DBB), CM@R, design-bulder (DB) and other more traditional forms. Both IPD and JOC have been proven for decades and are well evolved.
2. Validate Contractor and Subcontractor Quotes
Obtaining comparative bids on all subcontracted work will not provide sufficient cost visibility. Cost management can only be achieved through the process of owners created independent line item estimates. The latter can be achieved throught the use of reading available objective third party cost database. It is critical however that the cost databases be locally researched. The use on national average cost data and location factoring will not provide adequate cost visibility.
3. Improve by building, retaining, and sharing Knowledge and conducting regular independent review Audits
The expectation and requirement is that all work must be auditable. This can only occur with the associated used of robust process and standardized information. All construction task and costs sent to the owner or design-builder can therefore be reviewed, audited, and validated for contract compliance and compliance with fiduciary responsibilites. Owner and design-builds therefore develop and maintain consistently formated documentation as an expectation from the outset of project conceptualization through plannig, procurement, and project delivery and beyond.
