PARTNER OR PRICE TAG?
Why lowest cost doesn’t mean highest value.
Construction projects are costly, and it’s easy to feel tempted by a low bid. But should you really go with the lowest price?
Often times, a low bid is not a complete picture of the project as a whole. While the proposal might be appealing on the front end, additional costs are likely to pop up through a list of design discrepancies resulting in change orders, hidden job costs or exploited loopholes.
It takes a certain amount of money and time to build something beyond the cost of materials. It’s going be expensive; it’s an investment. A general contractor may account for less than 10% of the total price of a project; however, your GC controls 100% of the materials and labor it takes to construct your building. Over 90% of your budget lies in the hands of your general contractor. So instead of just looking at the cost of a construction company, you should also consider their dependability.
After all, you don’t go to the cheapest dentist, doctor or car mechanic. You go to people you trust.
Why You Need a GC You Can Trust Involved Early
Problems begin with the design of the building: 70% of rework is due to flaws in the initial building plans. Getting a GC involved early can help catch design flaws before they become a problem. Additionally, the majority of owners want a better relationship with their contractors. Start a partnership with your GC early on to have a more cohesive project.
Information from Construction Productivity Blog
Owners who feel they need more collaboration with their contractors
Owners who feel like poor contractor performance is the biggest cause of project underperformance
Amount of construction rework that is a result of design-induced rework
Over time, we’ve found that the best approach is to bring on board a dependable, general contractor (GC) as early as possible. Many GCs offer preconstruction services that can save you money in the long run.
Preconstruction services include anything that must be considered before ground is broken on a project, such as design, function, materials and schedule. There are many details that affect construction beyond the design of the building. Factors such as topography, accessibility, permits, building materials and soil can all have an effect. For this reason, it’s a good idea to ask your general contractor about their preconstruction services. At PRC, we find it helpful to determine the feasibility of your project and make changes early on before potentially costly problems start making themselves known on the job site.
A good general contractor can also help with sequencing (AKA: Figuring out the fastest, safest, most cost effective way to build a project). To take advantage of how your GC can help keep the construction of your building on schedule, involve them early on. For example, PRC looks to include specialty contractors during preconstruction because they are the experts in their trade and might think of timing constraints or constructability that the design team may not have considered.
Quality GCs provide innovative thoughts and processes to build a building, and ultimately, they can save you time and money.
Three Reasons to Involve Your GC Early
Site Selection and Acquisition
The location of a job site has a large impact on the project. Things like soil, landscape, and accessibility all affect the construction process. Find the most ideal location by involving your GC in the preconstruction process.
Expenses during a construction project can really add up. Involving a dependable general contractor early in the process can ensure that your budget and schedule are controlled. After all, no one understands the price of labor and materials like an experienced GC.
Relying on a GC for a project from start to finish allows for a much more efficient project. Instead of bouncing between multiple contractors and subcontractors, hiring a dependable GC early on will ensure all of your planning, designs, documents and bids are in one place with a clear point-person. Avoid miscommunication by consolidating early with a general contractor.
of construction professionals' time is spent on non-productive activities, including looking for project information and dealing with mistakes and rework
of total project cost is closer to the actual cost of rework, considering both direct and indirect factors combined
of rework is caused by poor project data and miscommunication
One way to save money during preconstruction is with value engineering. Value engineering ensures your project is customized to your goals, timing and budget. It’s the client’s money, and it needs to be spent in the most diligent manner.
Trustworthy general contractors can help make strategic decisions during the design process. When brought into a project too late, we often find the architect is already so far along in the design that there are limited opportunities to save money. The biggest opportunity to eliminate unnecessary expenses is in the building structure itself. It’s hard to implement cost-saving strategies when so much of the design is already set in place.
Simple replacements can save cost without losing function. For example, during one multi-family project, the original building’s design called for stainless steel aircraft railings that would amount to $808,000 for 160 balconies. Our project team was able to provide several alternative options at various price points for the design team to make a final decision. In this particular example, the owner selected a railing that cost $126,000, saving them $682,000. This is an easy example of how getting a GC involved early in the design process can save money.
On the last three projects at Shannondell Valley Forge, we were able to save the owner 3% because we were involved early in the process. We created cost-effective designs early on and drew them to fit the client’s needs. After all, your GC should work for you, not against you.
I was impressed by their continued willingness to work on value engineering ideas not only before but throughout the construction process; one of which lead to significant savings for the client.
Cost of the Typical Commercial Construction Project
It’s a common myth that the most cost savings can be found in the fixtures and finishes of a construction project. However, most of the cost of a building goes into project elements you’ll never see. Hire a trustworthy GC early in the design process to learn how you can save costs on these building fundamentals without losing functionality.
Information from the 2017 National Building Cost Manual
Construction is an investment. It’s possibly the largest investment any single person will ever make, so taking a low bid on the biggest purchase of your life — it should make people think twice.
Our advice: Whether or not it’s PRC, find a general contractor that is invested in you, your clients and your people to help you succeed. Develop a long-term relationship. As a GC, we get to know our clients and what’s important to them. We take time to understand their thought processes and their future plans so we can tailor our projects to suit our clients better.
Find a GC you can trust. A partner is more valuable than a price tag.