How an Independent Construction Cost Estimator Helps Close the Gap Between Design and Feasibility
Within the field of architecture, engineering and construction, an inherent conflict is derived from the tension that develops between the vision the owner and design team have for a project and the realities of budget constraints.
For example, it’s possible for a 150-key hotel to be as cookie-cutter as a business travel hotel built on a suburban shopping mall out-parcel, or as unique as a boutique property developed on a former brownfield site in the heart of the city.
Traditionally, the owner has a vision for the project, and an initial concept is developed by the architect, then a design is developed from that concept. Then, in a traditional design-bid-build environment the final design is bid on by general contractors, and the lowest responsible bidder is selected to build. In the negotiated project environment, a general contractor is brought onto the team in order to provide construction estimates on the design. There are many variations to both of these scenarios. However, once a general contractor is involved, they become the responsible party for cost management. Any ambiguities or unknowns in the project will be addressed by either conservative estimates or re-direction back to the owner via contract language.
On the other hand, if the owner retains a professional, independent cost estimator, at the outset of the project planning phase, it is more likely that there will be a fundamental improvement in the process because the cost estimate is more precise from the beginning and is structured in a manner that everyone can agree on. In turn, the owner can reduce the inherent friction between design and budget because the estimator helps the owner mitigate risk from the very beginning of the project.
Here are some key reasons why this is beneficial to the parties and the project:
Simplification of the Costing and Delivery Process
It may sound counterintuitive, but the key to success in a complex construction project is often a strategic focus on simplification. That’s not to say the project is simple or that there aren’t intricate designs. However, the costing and delivery process should be kept as simple as possible. For example, standardizing the finishes in back of house spaces could improve both the finished product and the project’s overall cost. The independent cost estimator can make these recommendations early in the design process, freeing the owner and architect to make decisions on the more significant aspects of the project. Let the cost estimator worry about the small details and come to you with decision-making opportunities and benefits, not sources of potential ‘analysis paralysis’.
Reduction of Unnecessary Expenses
As the owner, you want to keep your costs minimal as much as possible, yet achieve the highest-quality outcome. By using an independent cost estimator, you can reduce project costs where they are unnecessary. This is because with a far more precise project budget in-hand, ambiguities are greatly reduced, known by the entire team and managed with the owner’s complete knowledge. As a result, there’s less time standing around and more time getting things done, so you aren’t needlessly paying money out when things aren’t getting accomplished. In the long run, you’ll save money.
Cost estimation services are also beneficial because the owner saves money through a more efficient design schedule, and estimates that ensure projects are completed under budget. This is beneficial because the owner can most effectively put his investment to work. If the project is a commercial building, this means that there is a greater chance of project profitability, which means that the investment can be maximized in other areas of interest. If the project is a residential building, the owner saves money, which can be invested for other purposes, such as interior design. In short, the independent cost estimator empowers the project owner to achieve both the goal of maximizing the project’s finished value and ensuring the best financial outcome for the owner and investors.
Less Wasted Time
Using an independent cost estimator also means that you end up with less wasted time. So, as the owner, you won’t spend time in potentially contentious meetings to get all the information you need to come to your own decisions about cost changes, shifts in component availability or changes in the contracting team. Involving an independent cost estimator up-front enables you to reduce the number of these back-and-forth meetings that would be otherwise required between you, the architect, and the general contractor. Relating back to the prior point, this also saves you money.
There are a lot of benefits to having an independent, professional cost estimator involved in your project from the start. They can help you save money and time while also reducing your overall project risk. These benefits are invaluable to everyone but are especially helpful to owners with multiple projects going at once. The use of an independent cost estimator helps ensure impartiality in the projects and budgets.
By placing an independent cost estimator in the position of evaluation and planning with you from the start, you are able to delay general contractor engagement until a more efficient and effective point in the process.
This offers benefits to the owner because that individual manages the risk, not the market. When the construction market assumes the risk, they will be more likely to err on the conservative side or enter into conflicts with the project design.
The benefit of an independent cost estimator is that the design is interpreted and the owner receives the best value in terms of ‘design aesthetics’, in the end. Feel free to contact us for more information on how our team can help you with your next project, wherever you are in the world.