Pre-construction is key to keeping costs down.

The summer may be coming to an end but the commercial real estate market in New York City just keeps getting hotter. The increased activity is wonderful, however it is occurring at a time when construction costs continue to rise. As a result, value engineering (otherwise known as cost saving alternatives) is commonly practiced in today's interior projects. At many levels, it's a sensible approach to the skyrocketing prices that have impacted everything from fuel to copper costs as well as labor and insurance costs. With respect to interior build-outs, value engineering has become the catch-all for reducing overall construction costs to meet the client's budgetary goals.

But is value engineering the best solution to reducing costs? It depends on how and when it occurs. When value engineering occurs after the drawings are 100% complete, and the project has been bid out to contractors, value engineering and cost saving solutions at that point become primarily focused on design and material selections. When value engineering occurs during the early stages of the design phase, there is more time to focus on saving money through construction means and methods, and providing due diligence on material selections as well as the overall conceptual and preliminary design costs. Early value engineering (otherwise known as traditional preconstruction planning) can save much more money in the long run while maintaining as much of the design intent as possible.

In construction, time is money. Construction budgets that are prepared during the conceptual design phase ultimately save time and money because the costs of the design will be determined early on. Modifications to the scope and/or budget can be exercised at that point prior to finalizing the design documents. If all parties are well informed of the direction the project is headed throughout the design phase, the need for subsequent value engineering at a time when construction should be commencing can be virtually eliminated. Continually budgeting during the design phase when the drawings are being produced helps to ensure the design documents are consistent with the predetermined budget. The end result is a project that includes most of the intended design elements, where the construction phase commences on time, and where the overall costs are in line with the client's budget.

Another significant cost saving alternative with respect to preconstruction is the methodology of ordering materials during the design phase. Ordering long lead items prior to the construction phase can and will save money. For example: obtaining all the lead items on or ahead of schedule will in most cases result in performing the installations of these lead items on straight time as opposed to installing on overtime. Long lead items such as millwork, lighting, HVAC units, accessories, architectural metal and glass, stone and marble, etc. which require accelerated fabrication/shipping/installation to meet the project schedule clearly ends up costing more money. Once the construction clock is ticking, fabrication and deliveries must be made on time so that installation can take place within the project schedule. If items are purchased during the preconstruction phase, the client in most cases can and will avoid the premium costs for shipping and installation. As fuel costs have drastically risen, so has the cost of quick shipping. Therefore, prepurchasing during the design phase as opposed to purchasing during the construction phase is an evident solution to keeping the overall construction costs down.

Proper preconstruction planning yields a well-coordinated, organized project which translates into minimal downtime for the entire design/construction team. When construction proceeds as planned, future project obligations may be met on schedule and the need for overtime can be significantly reduced. Most importantly, the ability to provide a quality product on time reflects well on everyone and translates into a successful design team relationship.

Pre-construction planning produces the most beneficial results when it commences as soon as the architectural team is assembled, along with the engineers and construction manager. In this way, budgets are more accurately determined at project inception, most if not all of the design intent is maintained, materials and long lead items are prepurchased to ensure availability, the project schedule is maintained and costs can be significantly reduced.

By MICHELE MEDAGLIA

PRESIDENT & CEO 

ACC CONSTRUCTION