This One Factor Influences Construction Costs the Most
There are many factors that influence the cost of construction. Some are obvious: land acquisition, permits, and construction costs. Then there are the future costs or life-cycle costs to consider: maintenance, repair, replacement—the cost of keeping the facility and its systems up and running.
One of the most effective ways to control construction costs is to establish early involvement on behalf of the owner AND the contractor. This may seem obvious, but under the traditional method of construction delivery, the owner commissions an architect or engineer to prepare drawings and specifications, then separately selects a contractor by negotiation or competitive bidding at a later stage in the project’s development.
This can present a number of problems for the owner: Can the design be built for the budget and within the desired timeframe? If the project needs to go back to the drawing board, how much time will be lost? What if the architect and contractor disagree? How many contracts need to be managed?
In contrast, the most effective way of achieving early contractor involvement is by employing the design-build project delivery method, pictured below. Design-build streamlines project delivery through a single contract between the owner and the design-build team, creating an environment of collaboration and teamwork between the designers and construction team.
In addition, pre-construction services provided by the contractor, such as feasibility studies, financing options, site selection and logistics, conceptual planning, value engineering and scheduling provide an opportunity for collaboration and help determine the viability, and ultimate success, of a project—well before the shovels hit the ground.
As illustrated in the Cost Influence Curve pictured above left, decisions made early in the conceptual planning and design phases have a dominant influence on the cost and completion time of the project. It quickly becomes evident that the owner holds the key to controlling project construction costs because all decisions made at the onset of a project have far greater influence on costs than those made at later stages. In addition, design and construction decisions made early-on will influence on-going life-cycle costs.
When the owner works with a single team under one contract, it is far easier to balance his or her facility needs and budget with the design, materials, systems and construction processes required to maximize the owner’s revenues.
When you work with Penzel Construction from the beginning, you benefit from our integrated design-build approach that works to successfully complete a project faster, safer, more cost-effectively and with fewer change orders.
ABOUT PENZEL CONSTRUCTION
At Penzel, we are always innovating and finding ways to help our clients achieve their goals—through design-build construction delivery systems, competent trained employees, and state-of-the-art equipment and techniques.
We have come a long way in the last century and we intend to be here doing what we do best for many decades to come.
