Friday, October 21, 2011

Managing Project Costs

One of the more difficult aspects of Educational Facility Planning is managing the cost of the project. From the inception to the completion of the project, you must constantly review where you stand related to cost. Building costs are just a part of the equation when looking at the entire budget of a project. Other costs will include Architectural and Engineering services, purchasing and surveying of land, geotechnical or soil investigations, construction material testing, furniture-fixtures & equipment (FFE), roads and utility extensions for water, sanitary sewer, and power requirements to just name a few. All of these items totalled could be as much or more than 30% of the cost of the buildling.

When looking at strictly the cost of the building, it is governed by three factors; the quality of the bldg materials, the quantity of space, and the schedule in which to build the project. As I mentioned in a previous blog regarding Tech specs, this is where you define the quality of the bldg materials. The difference between providing a vinyl tile floor or one using terrazzo is significant. Vinyl tile costs $1.25/sf installed, terrazzo is approx $25/sf. You must also understand the difference in the life cycle of the material being used. The vinyl tile flooring is considered to be in the range of 15 to 20 years before it will have to be replaced. The terrazzo flooring is considered to be a lifetime product. When you average out the maintenance costs of each, you may find that the terrazzo is the more suitable product for the life cycle of the building. You must then determine if the upfront costs can be afforded. This is just one example of the types of decisions that must be made when designing a structure. Your design professional should be able to guide you through these decisions, but you need to be able to be conversant with the issues.

The second factor is the quantity of space. As the design progresses through the process, it is often easy to see additional needs that may not have been addressed early on. When adding space to the project always have the cost estimate revised as well.

The final factor is the time given to construct the project. If the schedule is compressed and the construction firm must provide additional labor to meet that schedule, it will affect the cost. Also if work is added to the project and the time line is extended, the contractor will incurr additional overhead for staffing the project and the cost again is affected.

The question I get asked the most is 'how much per square foot does a school cost these days?'. I always answer, "it depends". It depends on the three factors I have
discussed above. If you can tell me the quantity and quality of space you want, then I can tell what it will cost. We are in interesting times in regards to construction costs. The effects of the recession have kept building costs down the last two years, however we are now seeing a slow trend of rising construction costs. I will polish up my crystal ball to look into the future to see what buildings will cost in the near future, only time will tell.

Michael King AIA

6 comments:

  1. Because the quality of the laborer/construction company wasn't mentioned, I am assuming that when discussing a $10 million project, the three items mentioned affect the cost significantly and the quality of the construction company isn't as significant a factor. I am under the impression, however, that in the bidding process, there are significant differences between some of the bids and the quality that goes with those bids. Does quality not play a part in the price? Your thoughts, Mr. King, would be appreciated.

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  2. I think that the three basic components in gaging construction costs for a building project is a good place to begin. There are so many aspects to the planning process that it becomes overwhelming. An architect that specializes in building schools would be of a great benefit to a district for this planning process. A district must know what they are wanting to achieve, but an architect is the master who helps them put it all together within the district's financial parameters.
    B .Irick (TSU)

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  3. The best way to make sure you will save money and get more bang for your buck is to make sure you have the right person taking care of the project. In our building project we used a contract manager at risk deliveray system to build our building. It cost us a little more money up front, but when the final bills were paid we realized lots of money saved.
    CGibbs(TSU)

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  4. As Mike said, " it depends." A district can build a school out of brick and marble, or they can just put up a metal building. A district needs to really study their needs and the decide what to build, DEPENDING on their needs.
    CGibbs(TSU)

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  5. The quality of the construction company is of paramount importance. The factor of quality that I was referring to is the quality of the building materials used to construct the project. The cheaper the building materials usually means more expense down the road in maintaining those products. You must look at life cycle costs of the systems and products, which is the expected life of the building using the particular products selected. For example, a masonry building is considered to be a 75 to 100 year life cycle structure. Whereas a pre-engineered metal building is considered to be 20 to 25 year life cycle.

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  6. Here again, Mike points out to another excellent point that may often get overlooked. "Value Engineering" in the initial costs of construction, really only offsets the owner costs to another day. An owner who will retain and use the facility for a long time, like public schools, governmental agencies, and other institutions should carefully evaluate their projects from a long-term costs perspective. When all life-cycle costs are factored in, often times, paying for certain things upfront will be more realistic and will make more sense.

    Typically, building systems and materials such as infrastructure, foundations, exterior finishes, and roofing are critical elements in the long-term longevity of any building. In addition, the premature replacement of these systems and materials will generally cost more than the initial savings attained by installing more inexpensive ones. Majority of interior materials and finishes are much more easily accessible and reasonably less expensive to upgrade.

    TToros-KSU

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