The construction procurement process is flawed. While this is not news, what can contractors and estimators do about it? The root of the problem really starts at a project's conception. Owners not only want to develop their property for the lowest cost possible, they want a quick delivery to reap optimal profit margins.
It is our capitalistic nature to look for the best product for the cheapest cost. But is the least expensive product always the best? Most of us would emphatically say no. Why then does the construction process continue to reward the lowest bidders? It boils down to education and tight wallets. Unfortunately many owners lack proper knowledge of the process when it comes to spending their money.
It is not our place to expect owners to be construction experts, but they should have a general understanding of the process. When we encounter owners unfamiliar with all available options, we should feel a moral obligation to educate them. Education is a terrific way to connect with a customer and develop a lasting relationship.
What is better than a repeat customer? A satisfied repeat customer who understands the construction-procurement process and has confidence and trust in the construction team's suggestions.
The earlier a contractor gets involved in the procurement process the better. Unfortunately, since time is always of the essence and the design process is usually so lengthy, most owners search for a design team first. Since most owners believe they should save money and contract with the most competitively priced designer, the almighty dollar will likely rule this search.
Many owners will realize they get what they pay for. The least expensive designer may be the most qualified, but a designer willing to provide services for less may spend less time on the design.
The designer may be unfamiliar with the project type being developed, which is the most significant problem since engineers or architects inexperienced with a certain type of structure may not be aware of the potential pitfalls or the most practical industry standards.
While this may not seem significant, consider an MEP engineer applying the mechanical, electrical and plumbing standards of a hospital to a condominium. The engineer will have grossly over-designed the project and needlessly inflated the MEP trades' construction costs.
A number one priority for contractors should be evaluating the construction documents and informing the owner when incomplete or excessive designs are found. By persuading owners to involve the contracting team early in the design-development stages, contractors can assist in establishing realistic project construction budgets early.
As the design develops, the contracting team's involvement can help steer the design team toward a solid, realistic and successful construction budget. Providing the owner with detailed and forthright information during this process will gain the owner's trust and provide instruction for future projects.
Helping an owner to understand how to spend their money is not always an easy task. However, raising red flags to point out unnecessary items and systems can improve the project's bottom line or allow the owner to delegate those funds toward another system integral to building function and safety.
For example, an integrated building system might benefit a high-rise condominium's long-term energy costs, but the initial cost of the system may outweigh the need. The money saved could be applied to a transient-voltage surge-suppression system that may have been left out of the design and would provide long-term cost savings by protecting the entire power-distribution infrastructure.
Conversely, evaluating a set of project documents may reveal a nonessential but beneficial system inadvertently left out of the design. This system may have great long-term savings for a small initial construction cost.
We should raise the same red flags and make the owner aware of the potential benefits and rewards versus the small initial risk. There are hundreds of items in many projects that could be addressed this way. It is our job to find them and make the project better, more functional and save money when possible.
This is an aspect and requirement of our job. We are the construction experts and must actively educate those around us. The long-term benefits of improved customer relationships, industry standards and industry respect are well worth the effort. EC
ROLFE, CPE, is a senior estimator for Centrex Construction Inc.,current chapter president of the American Society of Professional Estimators Gold Coast Chapter No. 49 and an adjunct professor with Florida Atlantic University for Advanced Construction Estimating for Electrical Systems.