Do you trust your project team of designers, engineers, project managers, and construction managers? Do you value your collective expertise and time? Do you like saving time and money? Do you want to eliminate as much risk as possible? If the answer is yes then a preconstruction arrangement to support design assist, design-build or CM-at-risk construction delivery methods is the right path.
Preconstruction is a methodical process of detailed planning, due diligence, and clear communication between the team and the client. When performed diligently, it guarantees a smooth execution and successful outcome of the project. By making an investment up front Owners realize tangible savings (dollars) and time savings (speed to market).
I recently participated in an ICSC panel discussion on construction costs. The main concern from an audience of developers, landlords, tenants, and professional consultants was the state of the construction market as it relates to material sourcing and cost escalation. “How do we reduce costs and mitigate this risk?” The collective answer from the panel made up of decision-makers from construction companies, design firms, and OPM firms was – Do. Not. Skip. Preconstruction. Onboard your project team early. This process can be a short process over the course of a few weeks or a lengthy process spread across months. It depends on the project size and scope. Either way, the end result is the same – increased cost savings realized in material sourcing/selection, efficient construction means and methods, locking in competitive subcontractor labor commitments, increasing communication with key local building authorities, and an overall reduction in costly surprises by doing minimal exploratory work. Preconstruction is not Business Development. Preconstruction refers to actual services rendered that finalize deal-making including final lease terms, work letters, permitting, early release packages, value engineering, writing scopes of work, bid leveling, etc.
Preconstruction services begin with a target value design. We’ve all heard the old adage about schedule, cost, and quality. The saying is that you can only pick 2 for your project. By onboarding your team early you absolutely can achieve all 3.
By collaborating in a target value design process Owners share the financial and schedule goals of the project ensuring that the entire project team is committed to achieving these goals.
The entire team collaborates through schematic design, design development, and construction documents. This process affords the design consultants to utilize real-time cost feedback as the documents are progressed. This process ensures a clear scope of work and specifications is developed and promotes effective communication across the entire project team. By opening these lines of communication owners experience an overall reduction in change orders. The saying goes “You never get a better price than you do on bid day.” By having the entire project team weigh in on design decisions allowances are eliminated and scope gaps are minimized therefore reducing overall project risk.
“If I sign up a team for preconstruction, how can I be certain I’m getting a competitive construction number?” By selecting a team of consultants to collaborate throughout the front end of the project you can bid out early release packages across the subcontractor market. The subcontractor base knows it is competing for the work and also recognizes the odds of winning are increased when bidding to one builder. This garners greater interest from an already busy subcontractor market.
Fernando Rodrigues, is a Director of Estimating for New England Construction. He can be reached at frodrigues@neconstruction.com or on LinkedIn.
