The Guide to Construction Cost Optimization provides a road map for applying best management practices to drive financial visibility and transparency.

Introduction

Objective, verifiable, and locally researched detailed line-item unit price construction data provides the highest level of cost visibility and cost management capability.

Since other levels or types of cost estimating can’t meet this level, care should be given as to what form of cost data is being use.

Other, less stringent forms of cost estimating include the following: national average line-item cost data (with or without adjustment or localization factors), system or assembly level cost data,  building level and/or other forms of parametric cost data, as well as historical cost data and economic factoring.

Labor

Based upon contract requirements, local labor costs may be sourced from published Davis Bacon Wage Rates, or published state data sources, or directly researched local prevailing wage rates with appropriate inclusion markups for worker compensation, unemployment, liability insurance and allowance for small tools and consumables.  In the public sector,  federal government contracts may require Davis Bacon Wage Rates or prevailing wage rates, or both, with the usage of the higher of the two.   Markups include worker compensation and unemployment insurance costs per state in which work is performed. Liability insurance based upon local contractor rates is also added as a percentage. Finally, a percentage of labor is added for small tools and consumables based upon the labor category. The base rate usually does not include overhead and profit, however, can be added later to ensure data integrity.

In addition, highly specialized subcontract items may require travel and per-diem expenses for mechanics.

The labor-hours expressed in quality construction cost databases reflect average installation time, using an efficiency level that is consistent with the particular trade.

Material Costs

Material costs are local for commodities such as concrete, asphalt and aggregate. Other material costs are based upon either local costs, national or regional costs. Many items that are researched do not vary nationally due to the national pricing by many vendors and manufacturers. Some costs are regional and are priced for large areas of the country such as western, central and eastern states. If regional or national prices are used, these should be checked against local pricing to assure that the local costs do not significantly vary. Material costs are either local, regional or national depending upon the location. Sales tax is generally not added unless requested to ensure data integrity.   Material prices must consider whether local areas are remote  or congested inner-city regions which can cause significant variance.

Equipment Costs 

Equipment costs are either local rates or a national rate for each piece of equipment used in crews performing the task based upon daily usage. Overhead and profit markups are not included in the pricing, but can be added electronically to the database as needed.
General Conditions

General overhead and profit can be added by percentage if desired.  In addition, some general provision items can be added to the estimate such as construction trailers, cleanup and temporary power.
Quality / Quantity

The prices for materials and the workmanship are based upon normal construction standards. Many material prices can also be adjusted for quantity as an adjustment factor in the database.   The are generally provided in the form of line item modifiers.  Modifiers are add or deduct cost from the parent line item.

via Four BT, LLC, the AEC industry’s innovative integrated project delivery, detailed locally researched construction cost data, and SAAS technology solutions provider. Integrating powerful, proven project planning, procurement, and execution methods to help guide organizations to achieve accelerated improvement of their facilities repair, renovation, and construction outcomes. We focus upon supporting a collaborative culture and client-specific programs centered upon delivering customer value, driven by, proven LEAN processes, actionable data, enabling cloud technology, ongoing training, and continuous improvement.

Better CONSTRUCTION COST ESTIMATION workflows can be used by owners and design-builders to better navigate the journey to improved cost visibility and cost management.

Leveraging single resource for  Objective, Verifiable, and Current LOCAL MARKET granular construction tasks (over 90,000) replete with labor, material, and equipment costs and productivity informatoin is a proven pathway to the development of a ROBUST SCOPE OF WORK and OnBUDGET project delivery.

Reliance on subcontractor or contractor quotes and national average cost data and location factoring, or historical cost data introduces significant cost errors of 30% to 40%+.

Learn more today.

Engage in data driven cost estimating with objective, verifiable, and current local market labor, material, and equipment price books from 4BT (Four BT, LLC).

Approximately 90,000 line items including demolition lines and line item modifiers available within an easy-to-use web application.

Target Value Delivery (TVD) is “a management practice that drives the (design and construction) to deliver customer values within project constraints” (Ballard, 2009).

How to apply TVD:

1. Early involvement and ongoing participation of owners, engineers, and design/builders.
2. A robust collaborative project delivery methods and associated written “execution guide” or “operations manual” as part of contractual documents that aligns mutually biennial goals and outcomes for all participants.
3. An objective, verifiable, and current, granular, locally researched database of labor, material, and equipment costs and tasks, shared by all participants and organized in a standardized, easily understood and manageable manner.  Learn more.
4. A centralized data repository and associated quantitative metrics
5. Initial and ongoing training for ALL participants and stakeholders.

The importance of actionable construction cost data cannot be overstated.  From preconstruction through procurement and project delivery, actionable construction cost data is required in order manage multiple aspects of any size repair, renovation, maintenance, or new build project.

Characteristics of actionable cost data:

1. Organized using a standard data architecture – example CSI Masterformat
2. Objective and verifiable
3. Granular components – Individual construction tasks, each with a Description (in plain English and using industry standard terms), Unit of Measure, Labor type and cost, Material type and Cost, Equipment Type and Cost, Productivity rate (based upon associated crew)
4. Locally researched – (national average cost data and location factoring provides insufficient cost visibility)
5. Current – (Cost data should be updated quarterly at a minimum, or more frequently based upon market events)

Granularity and Specificity:  Locally researched cost data offers detailed, project-specific information, capturing variations in costs within specific locals, regions, or even specific sites. It considers the exact materials, labor, and equipment required for the project’s location.  The use of construction cost indexes or area location factors, or other generalized adjustment factor does not capture these fine details, potentially leading to inaccuracies of up to 30% to 40%+ or greater.

Curret actionable cost is is critical in an economic environment where costs can fluctuate rapidly.  It is directly sourced from the market where the project is being executed. It can account for local variations in labor, material, equipment and site conditions.

Lean construction aims to embody the benefits of the Master Builder concept, as does Advanced Job Order Contracting, Integrated Project Delivery, and Alliance Partnering.

The Master Builder concept is an ancient approach to construction, where a single individual or entity is responsible for both the design and the construction of a project. This role encompasses all aspects of planning, architecture, engineering, and building, integrating both creative and technical responsibilities. Historically, the master builder was seen as a highly skilled craftsman and a leader who had deep expertise in all areas of construction, overseeing projects from inception to completion.

Key Characteristics:

1. Unified Responsibility: The master builder held ultimate responsibility for the project, ensuring it met design intent, functioned properly, and was built to high-quality standards.
2. Integration of Design and Construction: Unlike modern construction, where design (architecture) and construction are often separate entities, the master builder concept integrates both, allowing for seamless communication between design intent and execution.
3. Holistic Vision: Master builders had a comprehensive understanding of the entire construction process, from material selection to structural integrity, which allowed them to create cohesive, well-executed projects.
4. Historical Examples: Many iconic structures from ancient times including medieval cathedrals, Roman aqueducts, were built under the master builder model.

Modern Context

In modern construction, the master builder concept has evolved into initial concepts such as design-build, where a single entity manages both design and construction. While specialization and complexity have grown over time, the core idea of integrating design and construction to ensure quality, efficiency, and cohesion remains valued.

Today the Master Builder concept has evolved into frameworks like Integrated Project Delivery (IPD), where a single entity or team is responsible for both the design and construction of a project, and Advanced Job Order Contracting (example OpenJOC(TM) Open Job Order Contacting.  Although today’s construction processes are more specialized and fragmented than in ancient times, the underlying goal of integrating planning, design, procurement and project delivery/construction remains, aimed at improving efficiency, reducing conflicts, and enhancing project outcomes.

Key Modern Concepts Based on the Master Builder Idea:

1. Design-Build (Partial Lean solution):
   • Single Entity Responsibility: In the design-build model, one company or a team is contracted to handle both the design and construction aspects of a project. This contrasts with the traditional design-bid-build approach, where design and construction are handled by separate entities.
   • Advantages: This integration helps to streamline communication, reduce delays, manage costs more effectively, and minimize disputes between designers and builders.
   • Collaboration and Efficiency: The design-build process fosters collaboration from the start, as the design team works directly with the construction team to ensure the design is feasible, constructible, and cost-efficient.
2. Integrated Project Delivery (IPD):
   • Shared Risk and Reward: IPD is a highly collaborative approach that brings together the owner, designers, contractors, and often key subcontractors under one contract. All parties share the risks and rewards, fostering greater collaboration and innovation.
   • Technology Integration: The use of advanced technology, such as Building Information Modeling (BIM), enables better coordination between design and construction teams, echoing the holistic control the master builder once had over a project.
   • Focus on Outcomes: IPD aims to optimize project results, increase value to the owner, reduce waste, and maximize efficiency, aligning with the master builder’s role in ensuring the best possible outcomes.
   • Lean Construction Principles: Modern construction methods, especially those involving Lean principles, emphasize waste reduction, collaboration, and continuous improvement, which are aligned with the holistic vision of the master builder.
3. Advanced Job Order Contracting (JOC):
   • Integrated Planning, Procurement, and Project Delivery: While JOC has been traditional used primarily as a method to speed procurement, when deployed more holistically, as a Broader Integrative Tool it can serve as a comprehensive tool that integrates planning, procurement, and project delivery, leveraging granular cost data to enhance overall cost management and project outcomes.  JOC can synchronize internal planning (like project scheduling and resource allocation) with external factors such as contractor selection and supply chain management. This creates a cohesive framework for managing projects, ensuring that all steps align with the broader organizational goals.
   • Single Source of Responsibility:  In a JOC, like in the Master Builder concept, there is a single point of responsibility for executing the construction projects. The contractor is on-call for various jobs under a pre-negotiated contract, making them the go-to for all construction-related tasks within the scope.  The JOC contractor is responsible for managing and delivering construction outcomes, similar to how a Master Builder would oversee and manage the entire building process.
   • Efficiency and Streamlined Processes:  JOC is designed to allow for quick mobilization and execution of smaller, repetitive construction tasks without the delays of traditional bidding. This reflects the Master Builder’s ability to directly execute or oversee work without the inefficiencies caused by fragmented responsibilities. The pre-established pricing models and workflows in JOC resemble how a Master Builder might rely on standardized processes to maintain efficiency and quality over a series of projects.  The costs data used however must me current, objective, granular, and directly based upon locally researched labor, material and equipment costs and not based upon national averages and/or cost factoring.
   • Ongoing Relationship and Collaboration: In JOC, the contractor maintains an ongoing relationship with the client (often public instituion) over time, addressing multiple projects under a single contract. This ongoing collaboration is akin to the long-term relationship a Master Builder might have had with a patron or community, handling multiple construction tasks as needed.  The contractor becomes familiar with the owner’s needs and preferences, which can improve project outcomes—similar to how a Master Builder’s understanding of the client and their vision would contribute to success.
   • Objective, Granular Cost Data: One of the significant advantages of JOC is its ability to leverage current, verifiable cost data. The use of unit price books (UPBs) or other cost databases provides a transparent, accurate picture of costs for various tasks. This aligns with the need for cost visibility and transparency you mentioned earlier, which is crucial for effective cost management, especially in a Lean construction context.
   • Enhanced Cost Management: By using real-time, detailed cost information, JOC enables better cost prediction, tracking, and control. This can help avoid the common pitfalls of cost overruns or inaccuracies seen in more traditional models. The availability of such data also helps improve decision-making during the design and construction phases, similar to how the Master Builder’s deep knowledge ensured efficient project delivery.
   • Project Delivery Improvement: By fostering a streamlined and collaborative environment, JOC can help integrate project delivery processes with cost data and procurement in a way that improves efficiency, reduces waste, and leads to better project outcomes. This approach creates a feedback loop where data from completed projects inform future planning, creating continuous improvement in the process.
     • Efficiency and Control: Like the Master Builder, JOC allows for efficient execution, particularly for recurring or similar types of projects. The focus on efficiency and managing resources well, without the delays of traditional procurement methods, is a shared characteristic.
     • Continuity and Expertise: The long-term relationship between the JOC contractor and the client is somewhat analogous to the ongoing role of a Master Builder, who would have been relied upon for various construction needs over time.
     • Modern Applications of JOC Reflecting Master Builder Concepts:
       In summary, JOC shares some aspects of the Master Builder concept, particularly in terms of efficiency, single-source responsibility, and continuity.  It focuses on efficient, pre-planned construction tasks, often based on existing designs or minor modifications, and collaboration between owners and design-builders.  When implemented fully, JOC can integrate planning, procurement, and project deliver professionals.  JOC’s ability to integrate these elements makes it a powerful tool not only for procurement but also for project delivery and cost management, much like the holistic oversight of a Master Builder in modern terms.

Comparison with Historical Master Builder:

• Specialization: Modern projects often involve highly specialized roles (architects, engineers, contractors, etc.), unlike the generalist master builder of the past. However, these specializations are now more integrated under frameworks like design-build or IPD or advanced Job Order Contracting
• Collaborative Tools: The use of robust processes, actionable data, and advanced technology enables a level of precision and collaboration that the historical master builder could only achieve through deep personal expertise and oversight.

In essence, the modern construction industry’s shift toward more integrated, collaborative delivery models mirrors the holistic approach of the ancient master builder, but leverages modern technology and organizational frameworks to manage the complexity of today’s projects.

Isn’t it time for owners, designers, engineers, and builders to STOP thinking about accurate construction cost estimates?

The fact of the matter is that there is no such thing as an “accurate construction cost estimate”. 

Measuring accuracy requires a reliable reference point or datum.  In construction cost estimating there is no such value.  Many mistakenly use the actual build cost, others use historical costs, while other depend upon experience to measure some level of accuracy.  None of these can serve as a datum.  Bad datums provide poor measurements.

A construction cost estimate, however, can and should be Objective, Current, Granular, and reflect LOCAL Market Labor, Material, and Equipment costs.   A detailed, line items estimate using this information provides the highest level of cost visibility, transparency, and management possible.

A detailed line item cost estimate using objective, current local market granular line item construction task data delivers should therefore be used prior to the procurement of ANY repair, renovation, maintenance (including preventive, routine, etc.), and new construction service.  This is especially true for public sector organization where fiduciary responsibility is a legal and professional requirement.

GSA PBS JOC Program Management Audit – Issues Continue:  The General Services Administration (GSA) Public Buildings Service (PBS) has faced scrutiny and criticism in the past for various financial and management issues, including those related to Job Order Contracting (JOC) programs.

Financial Management Issues

1. Budget Overruns: There have been instances where projects managed by GSA PBS exceeded their budget estimates, leading to increased costs and financial inefficiencies.
2. Mismanagement of Funds: Audits and reports have sometimes highlighted improper use or allocation of funds, affecting the overall financial health of the agency.
3. Lack of Accountability: Poor financial tracking and reporting mechanisms have occasionally resulted in a lack of accountability for spending, making it difficult to identify and rectify financial mismanagement.

Job Order Contracting (JOC) Program Management Issues

1. Inefficient Contracting Processes: Delays and inefficiencies in the contracting process have been a recurring issue, affecting the timely execution of projects.
2. Lack of Oversight: Inadequate oversight and monitoring of JOC projects can lead to quality control issues and deviations from project specifications.
3. Contractor Performance: Problems with contractor performance, including failure to meet deadlines and deliver quality work, have been reported. This can be attributed to both the selection process and insufficient management of contractors.
4. Cost Control: Challenges in controlling costs within the JOC program have led to budget overruns and financial inefficiencies, similar to broader financial management issues within the GSA PBS.  GSA continues to use national average cost data and location factoring for JOC Programs, despite the availability of objective, verifiable, current, granular construction labor, material, and equipment construction task data that is locally researched.

Addressing these issues often requires systemic changes, improved oversight, and stronger accountability mechanisms to ensure better financial and program management.

GSA PBS continues to faces challenges with the management of JOC Programs and cost control. A recent assessment highlighted deficiencies in pricing for the PBS Southeast Sunbelt Region’s Job Order Construction contracts. The audit revealed inflated or unsustainably low pricing due to flaws in price analyses. Inappropriate use of flawed pricing also impacted project cost estimates. Find out more in the memorandum: [Link to the memorandum](https://lnkd.in/eVmEKpgz)

Public sector facilities management has not measurably improved for decades.

The reason is simple.  Lack of organizational development readiness.

Despite the availability of integrated, collaborative, and robust frameworks that enable Planning, Procurement, and Project Delivery teams to performs at signinficant higher levels with respect to cost visibility, cost management, quality, and speed, public sector FM suffers from an endemic lack of accountable, capable leadership.

Mired in barriers to improvement, largely reinforced by leaderships inability or lack of interest in change, the public sector FM remains highly wasteful from both environmental and economic perspectives.

Technology will NOT solve the problem.

The real question is what disruptive event(s) will force measureable improvement?

Improving Job Order Contracting outcomes requires transformational change.

We have yet to reach a point where JOC is valued for more than simply speeding procurement times.

To date, most public sector owners use JOC to shorten procurement timelines without sufficient consideration of cost, quality, relationship building, or risk mitigation.  The net effect is that many owners are wasting hundreds of thousands to millions of dollars paying for “JOC consulting” fees as a percentage of construction costs, and not engaging with design/builders in a manner that achieve maximum benefit for both parties.

Learn more about collaborative Job Order Contracting…

Looking for a better Job Order Contracting application?  The 4BT OpenJOC^TM  Solution is just that!

Why is the 4BT OpenJOC^TM  Solution better?  Simple, it allows you and your team to…

• Leverage current best management practices with a focus upon collaboratoin and best value outcomes for all participants and stakeholders.
• Engage and empower the project leadership team and  higher level of stakeholder involvement throughout a project.
• Full owner/design-builder involvement without a “JOC Consultant” intermediary.
• No “percentage fee” based upon construction volume.  (Why waste hundreds of thousands of dollars?)
• Current, local market labor, material, and equipment costs, updated quarterly.  Over 80,000 line items.
• Access to experienced senior professionals by phone and email for support and training.
• Technology securely hosted on Microsoft Azure Government Cloud.

If you are looking for a better job order contracting solution, it’s time we talked.

1. Bolster your team with a diverse range of perspectives and expertise can help ensure you’re sufficiently covering all you requirements.
2. Transparently communicate your plans, SOWs, and requirements so that everyone has a firm grasp.
3. Remember that repair, renovation, maintenance, and new builders can no longer be the purview of one person or a small group of individuals.
4. Respond quickly to opportunities and problems and make timely decisions.
5. Use objective, current, granular local market labor, material, and equipement cost information.
6. Become independent of costly fee-based “JOC Consultants”.

Lower costs and improve performance today with the 4BT OpenJOC(TM) Solutions.

TM

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Learn more…  https://www.usgbc.org/leed/v5

via 4BT.us

While the concept of providing a standardized security approach may have been sound, FedRAMP limits Construction Productivity and Innovation,

The Federal Risk and Authorization Management Program (FedRAMP) is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. While FedRAMP aims to enhance the security of cloud services used by the federal government, it negatively impacts small businesses, the overall attempt to improve the AECOO sector’s low productivity, and innovation.

FEDRAMP is a clear create a barrier to entry for smaller businesses, reducing competition and innovation in the market.

Challenges for Small Businesses:

1. Costs: Achieving FedRAMP compliance is cost prohibitive for most  small businesses.  The cost of hiring consultants, implementing necessary security measures, and undergoing the assessment process is beynond the means of most small companies providing next generation solutions.
2. Complexity: The process of obtaining FedRAMP compliance is complex and time-consuming. Small businesses are at a distinct disadvantage with respect to navigating the requirements, leading to delays and increased costs.
3. Resource Intensity: Compliance requires a significant investment of time and manpower. For smaller businesses with limited staff, dedicating resources to FedRAMP compliance diverts attention from other critical areas of operation and growth.
4. Competitive Disadvantage: Large companies with more resources can more easily absorb the costs and navigate the complexities of FedRAMP compliance. This  is a clear create a barrier to entry for smaller businesses, reducing competition and innovation in the market.

Impacts on Innovation:

1. Inhibiting Experimentation: The rigorous requirements of FedRAMP discourages small businesses from experimenting with new technologies and services for the federal sector.  The fear of investing in a solution that may not meet compliance standards stifles innovation.
2. Slowed Development Cycles: Meeting FedRAMP standards slowse development and release cycles of new products and services. Small businesses end up spending more time ensuring compliance than focusing on innovation and improvement.
3. Opportunity Cost: The time and resources spent on achieving FedRAMP compliance that could beused for research, development, and bringing new ideas to market hampers the growth and competitiveness of small businesses.

Mitigation Strategies:

1. Simplification: Streamlining the FedRAMP process, especially for small businesses, would lower the barrier to entry. Creating tiers of compliance based on the scale and scope of the business might help.
2. Resource Support: Providing resources such as grants, low-cost loans, or consulting services specifically aimed at helping small businesses achieve FedRAMP compliance would make it more accessible.
3. Education and Guidance:  Many applications, especially those accessing publicly available information, do not require FedRAMP approval, yet many federal organization do not understand this concept, or worse yet use FedRAMP as an excuse to use favored vendors.   Better education about FedRAMP requirements and assistance in navigating the process can empower owners to use more efficient solutions and enable small businesses to tackle compliance more effectively.
4. Innovation Incentives: Offering incentives or grants for innovative solutions that meet FedRAMP compliance would encourage small businesses to continue innovating despite the challenges.

In conclusion, while FedRAMP’s intention is to enhance security for government data, its impact on small businesses and innovation is a serious valid concern. Addressing these challenges through simplification, support, education, and incentives could help strike a balance between security requirements and fostering innovation among small businesses and reducing the traditional high levels of financial and environment waste associated with the federal government.

Some suppliers of Job Order Contracting software and cost data use “Assemblies” within what is supposed to be a unit price book (UPB).

A fundamental element is Job Order Contracting (JOC) is line item estimating which involves breaking down the cost of  construction into discrete, granular tasks, each item representing a specific material, labor, and equipment components.  An example of a line item would be “0611162814000100 Framing- Walls- Studs- 8 ft High Wall- 2 in X 4 in”  This is in contrast to estimating based on assemblies, where pre-established sets of materials and labor units are used for common tasks, for example a “Structural or nonstructural interior partition wall Studs- 8 ft High Wall- 2 in X 4 in”  .  The latter includes studs, wiring, wallboard, etc.

Here are some key points to consider when using line item estimating for job order contracting:

1. Detailed Breakdown: Line item estimating requires a detailed breakdown of all the elements involved in a project. Each aspect, such as materials, labor, equipment, and overhead, should be itemized separately.
2. Unit Costs: Assign a unit cost to each line item. This could be the cost per unit of measurement (e.g., cost per square foot, linear foot, or unit) for materials, labor hours, or other resources.
3. Accurate Quantities: Ensure that the quantities associated with each line item are accurate. This requires a thorough understanding of the project scope and specifications.
4. Adjustments for Site Conditions: Consider any site-specific conditions that may affect costs and make appropriate adjustments. Factors such as site access, soil conditions, and local regulations can impact the cost of construction activities.
5. Labor Rates: Include current, local market labor rates for different types of work involved in the project. These rates may vary depending on the skill level and type of labor required.
6. Material Costs: Specify the cost of  materials for each line item based on current pricing for the local market.
7. Overhead and Profit: Factor in overhead costs and profit margins using the establish/accepted coefficient. These are essential for covering indirect costs associated with the project and ensuring a reasonable profit for the contractor.
8. Documentation: Clearly document each line item, including descriptions, quantities, unit costs, and any assumptions or considerations that went into the estimation using detailed notes.
9. Regular Updates: Regularly update the line item estimates contained within the unit price book/constructon task catalong.  Market conditions can fluctuate frequently.  (Note: 4BT recommend quarterly updating.)

Line item estimating provides a detailed and transparent breakdown of costs, making it easier to track expenses and communicate with stakeholders.  It is a fundamental element and requirement for Job Order Contracting. It allows for a more granular understanding of the project costs compared to estimating based on assemblies.

Four BT, LLC – Efficient, integrated construction planning, procurement, and project delivery solutions.

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental requirements for the consistent delivery of quality repair, renovation, maintenance, and new build projects.

AECOO Engagement, Alignment, and Sharing of Objective, Current, Veriable Information are fundamental to efficient project delivery.

Sustainability and Efficient Facilities Lifecycle Management go hand in hand.

While most of us are aware of the rampant economic and environmental waste associated with the repair, renovation, maintenance, and new construction of buildings and other physical infrastructure, few understand that solutions are readily available or have the will and commitment to deploy them.

Public sector facilities management is particularly wasteful due to the pervasive lack of capable, committed, and accountable leadership.

Most public sector organizations lack a holistic view and/or understanding of integrated planning, procurement, and project delivery.   They simply do not appreciate the fundamental requirement to apply apply collaborative principles to construction processes and activities.

Until there is significant improvement in professional and formal education, the barriers to the successful implementation of efficient repair, renovation, maintenance, and new construction will not be overcome.

Best value repair, renovation, maintenance, and new construction frameworks are readily available and include the following elements.

#1 Real property owner leadership via direct involvement, capacity, commitment, and accountability.

#2 Robust, integrated planning, procurement, and project delivery framework, processes, and workflows, with and associated multi-party contract and operations manual/execution guide.

#3 Common data environment inclusive of shared, local market, objective granular construction task data.

#4 Mandatory initial and ongoing training for all participants.

#5 Quantitative metrics and regular third-party independent audits.

#6 Enabling collaborative tech that embeds robust process and workflows.

Despite massive investments in physical infrastructure,  it will be impossible meet decarbonisation
requirements or conserve vital natural resources.   The current average waste invovle in facilities management “construction” ranges between 40% and 60%.

There is no shortage of solutions available to drive significant improvement in managment of the built environment.  The challenge remains adoption and proliferation.

Objective, reliable, and veriable Construction Cost Estimates are critical to best value outcomes for all repair, renovation, maintenance, and new build activities.

The estimating process begins with a comprehensive understanding of your project’s scope of work.  A knowledgeable and well-trained estimating team is a key component along with a robust  processes, procedures, a objective and granular local market construction task data.

#1 Pre-Estimate Stage

Reviewing Requirements 

Owner creates and initial Scope of Work.

#2 Joint Job Site Visit:

Owners and design-builders should always conduct a joint visit to the site to review existing/verify conditions.

#3 Building a Detailed Estimate

The best approach to completing is to create a detailed line item estimate via a quantity take-off and associating granular labor, material, equipment, and productivigy data for each line.   This will provide you with a clear technical and cost view of the project.

#4 Uniform and Consistent Quantities and Costs

A quantity take-off is a continuous list of items and measurements and leverage appropriate technology to enable information sharing, updating, and resue.  Quantities must leverage consistent, industry standard units of measure.   Costs must be current, objective, and locally reserached.   Both quanitites and costs should be presented in terms of a granular construction task.  Each construction task should be unique and identifed by using a standard data architecture (i.e. expanded CSI Masterformat).

#5 Understand Your Products, Material, and Labor Costs/Pricing

Factors that impact local market costs:

• Availability and demand for a product.
• Availability and demand for labor
• Availabiity and demand for equipment
• Delivery factors  (location, security…)
• Local market labor costs per trade (workers compensation, hourly rate, other “fringes”)

#5 Productivity

Calculation of individual or crew times to complete a task in hours should be represented in terms of a standard eight (8) hour day, and represent average local productivity factors.  Normal hour work productivity and cost can vary from non-normal work hours.

#6  Subcontractor Quotes

It is best practice to also require subcontractors to provide detailed line-item quotes.  Lump sum quotes, even if provided by multiple constractors, should never be considers sufficient. It is important to provide the same level of percision and same evaluation steps used for owner and constractor estimating.

#7 Addtional Cost Considerations

Mobilization

• Jobsite storage containers, required utilities, portable waste units
• Safety costs
• Dumpster
• Clean-up
• Other miscellaneous items, etc
• Fees (permits/insurance)

via 4BT.US – Objective, local market granular construction task data and robust construction planning, procurement, and project delivery frameworks.

The OpenBUILD(TM) Framework is a  standardized approach to construction data collection that collates data on all public sector projects across all locations in a common format.

Data is shared among both public and private sector audiences to leverage the latest methods and tools supporting optimal project planning, costing, procurement, delivery, and management. 

Learn more…. and request and informational session:

For over 30 years, the Department of Defense (DOD) has spent billions of dollars each year to acquire and modernize financial management, logistics, and other business systems.

“DOD is the largest federal agency, and the only one that has never achieved a “clean” audit opinion—which is when financial statements are presented fairly and are consistent with accounting principles. The challenge that DOD faces in modernizing its business and financial IT systems is a big hurdle to making its financial statements auditable.”

DOD’s financial management and business systems modernization have been on our (GAO) High Risk List since 1995.

This is just another example of poor leadership and failure to implement robust processes.

The lack of effective planning and oversight of itsbusiness and financial management systems are
critical challenges…  (GAO-23-106817 2023)

View Report https://4bt.us/wp-content/uploads/2023/09/DOD-Financial-Management-Improving-Systems-Planning-gao-23-106817.pdf