Get real: how can you arrive at an accurate construction estimate when you only have a vision? Simply follow these four steps to a credible conceptual budget.

Today, it seems like everything is focused on reality. We talk about doing things in "real time" and now we're even mesmerized by reality TV. But when it comes to budget estimating--especially trying to come up with an estimate built around a vision--that's when we most need to get real. For most university business officers, hope for an accurate estimate begins to replace reality with the first shovel of dirt in the expansion of a dormitory, or construction of a new research lab. After all, how can you get an accurate estimate when you only have a vision? Yet, conceptual estimating is an essential part of preparing a project's overall budget. Sixty to 70 percent of a project's total cost deals with construction. Benchmarking can be a valuable tool in establishing an estimate, but it is only one piece of putting together a credible conceptual budget. And once the figure is on the table, how do you stop hoping that the proposed number works, and instead make the figure a reality? In other words, how do you meet the requirements of the program and fit within the conceptual budget? You might be surprised to hear it con be done. Here's how.

ONE: START WITH TEAMWORK 

Teamwork among all constituents lies at the heart of a successful design-and-construction project estimate. This point may be best illustrated by relating the recent experience of a major university poised to break ground on an academic and research facility: The conceptual budget for the project had been created in a vacuum. With construction plans in place and a funding grant, all that remained for this university was for construction to begin. Suddenly, the realization struck that the building's heating ventilation and air conditioning (HVAC) plans were not up to the standards set by the National Institutes of Health. And in developing the budget, one question had not been asked: What was the source of the funding? As it turned out, the source of funding was, in part, the NIH. Needless to say, criteria for the funding hinged on the new facility meeting the NIH standards. But the standards regarding HVAC had not been considered in the conceptual budget; what's more, the architect had designed the building before the standards had been priced.

When we arrived on the scene, a major and very costly revamping of the design and construction plans was already under way. But after thorough discussion and an interview process, a feasible solution was reached when it was determined that the NIH criteria really applied to only 30 percent of the building. The university administrators quickly saw that teamwork at the project's inception would have caught the slip, steering the project in the right direction from the get-go, and avoiding a potential disaster.

TWO: DO YOUR HOMEWORK

As in most of life's projects, the more groundwork you do before you launch the undertaking, the better the chances for the project's eventual success. When it comes to successful conceptual estimating, however, the homework you will need to do falls into the following three categories:

Find out how the budget was put together. Knowing how the conceptual budget was arrived at is essential in quantifying the project's "knowns." Furthermore, this action builds the base for future budgetary needs that may arise. Dig deep into the budget; ask questions and ask often. Understand the thought process behind each and every number. Know the scope of the project, its programming needs, the desired timing and schedule. Get to the point where you feel comfortable in your knowledge of the estimate. This knowledge will be invaluable when discussing the project details with trustees, alumni, and other administration officials.

Identify potential gaps in the budget early on. Gaps are best described as what nobody talks about, but somebody has to buy. They occur simply because even the most inspired administrators can't envision every aspect of a project at the conceptual level, nor can the most skilled estimators anticipate every item in the program or every site and construction issue. Identifying gaps means identifying what will be paid for by contingency. In other words: Always allow for surprises. And, once you have identified potential gaps, prioritize and evaluate the significance of each, ensuring that all concerns are covered.

Determine what is non-negotiable. Every project contains driving elements that cannot be cut from a conceptual budget. For example, a research laboratory must meet minimum standards to be approved. It's necessary to look at such standards carefully, so that you understand what can and cannot be eliminated from the budget. In fact, understanding the non-negotiables of the project will come into play throughout the whole process, because, as long as gaps have been identified, it will become possible to steal from Peter to pay Paul, using the criteria of what is driving the program. It takes a thorough interview process to separate what is mandatory from what is wish list. A skilled estimator can strike a balance between construction and design needs, without sacrificing too much from either area.

THREE: DESIGN TO THE BUDGET

Working closely together, architects and contractors can work the budget into the design process. Together they can identify aspects of the program that have the highest price tag; they can analyze the design and evaluate whether or not these aspects are tracking in line with the conceptual budget. Working on an open-book basis at this stage of the process, architects and contractors can "force" the number to be what it needs to be--that is to say, they can make informed decisions about what to trade off, that will satisfy both sides. With a realistic bottomline budget on hand, elements first perceived as frivolous can now be added as bonuses (unique architectural touches or a school insignia, for instance). Business officers and directors can present these options as enhancements because they have confidence in the baseline number. Then too, a solid baseline budget prevents "scope creep," which occurs when the needs of the actual users of the building haven't been considered up front. If a school theater is up for renovation, for example, wouldn't the drama department chair and theater manager likely be the best parties to know the building's uses and requirements? If the architect and contractor interview the project's user groups up front, they will discover the actual construction or restoration requirements and can work them into the budget.

FOUR: ASSESS YOUR SUCCESS

Once the design team has taken the vision of the administration and transformed it into reality on paper, how does the business officer know he or she will be getting the best value from this process? Bringing the contractor on board early in the process to work with the design team means working with someone who really knows the market. This will help "time" the project to match market conditions. In addition, the project (of which approximately 90 percent is competitively bid to the trades) will be bid by the architect with guidance from the contractor, which wile ensure a complete price.

ALL THINGS CONSIDERED ...

The choice is clear. You can start your process by relying on the hope that the numbers will make the budget, or you can practice teamwork and the steps outlined above to make the number really happen. Done successfully by putting an accurate value on the vision, conceptual estimating can take a project from conception to completion. Really.

Lee Dellicker is vice president of the Institutional Group at Shawmut Design and Construction (www.shawmut.com), a $350 million construction management company located in Boston, MA.