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Spring 2007
 
Sidestepping Project Pitfalls

It’s not uncommon to experience a few surprises during a construction project, but you can avoid the unpleasant ones with good planning and by setting realistic expectations. Use these tips to keep your project progressing smoothly with reasonable costs.

Realistic Schedules
Everyone wants his or her building to go up as quickly as possible. Seeing the completion of each construction phase usually makes owners increasingly eager for the grand opening. Constructing a quality building takes time, however, and dreams may not line up with reality.

Owners may have solid business reasons for wanting a building completed within a certain time frame, such as being able to open a retail store to take advantage of holiday business, or renovating student residence halls before the start of a new school year. The only way to make it happen is with realistic planning. That means making the schedule fit the project, not trying to make the project fit the schedule.

Good planning requires an understanding of all phases of a project. One of the biggest misconceptions is how long the land-development process takes. The process can take from six to 12 months, or longer, depending on the complexity of the building design, the land characteristics, the speed of municipal approvals, and the thoroughness of the legal documents.

For example, if you buy a parcel because of the rustic beauty of a stream running through it, you may need to extend the schedule. A stream may indicate a flood plain or wetland, which means time-consuming environmental studies and possibly several rounds of land-engineering designs and approvals.

Seasonal influences also affect project scheduling. Any bad weather means unavoidable delays. Projects that start construction in the spring are simply more efficient than those starting in the fall.

Complete Drawings
Moving forward with incomplete drawings often spells trouble and additional costs later. Still, some owners push for pricing and progress right away, even though incomplete drawings often result in change orders.

You can occasionally move forward with long-lead-time materials for the portion of the project for which drawings are complete, but you’ll still experience some pricing uncertainty. In addition, incomplete drawings force subcontractors and suppliers to do a considerable amount of engineering on their own. Without having accurate parameters, calculated guesses result which sometimes turn out to be wrong. Many times, the greatest costs come down to the finishing details, which are frequently the incomplete sections. Owners who push to accelerate the process need to set aside a considerable contingency fund.

Sometimes there are conflicting ideas on what constitutes “finalized” drawings. The architect, project manager, and builder can agree that drawings are complete but the owner may look at them and say, “How can you tell me these are complete without miniblinds?” Even two architects can disagree on how final a set of drawings may be.

No matter what any of the parties hope for, you must have a completed set of drawings to start building construction and gain final municipal approval. Upfront communication about the desired level of detail is crucial.

Builder Selection
There is no substitute for research when choosing a builder. One of the easiest and most successful ways is to look around for buildings in your area similar to what you want. Investigate the builders who constructed them. Many building owners will talk to you about their experiences. Don’t forget to check out builder Web sites and the Better Business Bureau. A few builders will come to the top. Informally interview those builders to learn more about their experience and modus operandi. A social lunch is often a great way to do this in a positive, casual atmosphere. Talk to them in detail about what you’re thinking and find out how they work.

Don’t make the mistake of asking them to give you a “ballpark price.” Even if you can give them a good description of what you have in mind, they won’t be able to give you a good answer. They simply don’t have enough information. They’ll also worry that if the price they suggest is too high, the lunch will be over quickly! Or they’ll worry about giving you a price that is too low, afraid you may try to hold them to it later.

Don’t try to pit builders against each other in the ballpark price game. If you’ve talked one into giving you a number, don’t think you’re helping your cause by telling that price to another and asking if they can beat it. You will not hear an accurate, reasonable answer. Builders know that no matter how many times they tell you, “This is not a true estimate,” it will be the number you remember.

The builder you choose should have experience with the kind of building you want. For example, if you’re building a hotel, hire a builder that has constructed several hotels successfully. Make sure your builder is also very familiar with local subcontractors. They need to know what the local subcontractors can and can’t do well.

You need to know what internal resources you have that can help with the design and building process. If you don’t have many of the capabilities needed—such as your own engineer or project manager—you need to be sure your builder can take care of that work.

Many of these suggestions encompass trusting your builder. You want to work with those who show from the beginning that they will be honest with you on all issues, good or bad. Do you believe they will get along with the many kinds of people and businesses who must be involved in a project? It’s also reasonable to ask for a personal interview with the construction team that would run your project. The people who will work with you from start to finish, such as the project manager and project superintendent, are extremely important to get to know.

Project Scope vs. Budget
The more complete and finalized the drawings and specifications, the more accurate the budget will be. Be sure you know exactly what the pricing includes and what you are purchasing. Did you see the telephone systems specifically documented? Are any furniture and window treatments included? What about the cost of permits? If you aren’t certain if an aspect of your building is included, ask! It helps to have the architect, builder, and owner work from a single checklist of items that indicates which party is responsible for purchase and installation of each item.

Pay attention to “scope creep.” Adding additional conference rooms or making material upgrades may improve your building but will inevitably increase the price. It’s similar to purchasing a new car, only on a larger scale. You may think you know what amenities you want, but seeing the many possibilities often results in over indulgence. In a construction project, there’s a cost for everything you add—or change.

Even if you control scope creep, some material costs may rise unexpectedly or faster than builders anticipate. For example, concrete shortages in recent years resulted in supplier pricing that outpaced estimates by 25-35 percent. Don’t count on any decreases in material costs.

Good contractors will keep communication flowing on all decisions at key points in the process and will educate owners on the ramifications of all decisions and long-term business needs.

Local Approvals
A project can’t get rolling until the governing municipality is satisfied its codes and conditions are met. Unfortunately, if there is an aspect that can’t be easily pinned down it’s the municipal approval process. The key is to allow enough time. For example, if all the experts anticipate a project will take 18 months to complete, a full six months, maybe more, needs to be set aside for approvals.

Involving a civil engineer or a landscape architect very early in the process is the best way to start. If you have a land parcel that interests you, ask the engineer to walk it with you. Remember the story about the stream? You may think a parcel is perfect, but the engineer, especially one familiar with a particular municipality, can tell you the challenges. You may be able to work around these issues, but it may take much more time than you anticipate. And if the parcel is not zoned for your type of building, the rezoning or exception process can take years.

Different municipalities or even different agencies in the same municipality may interpret codes in different ways due to varying shades of meaning. Consider meeting with the municipality’s representatives up front to gain a good understanding of what they will require. If it’s not a type of building they’ve previously approved, the process can take longer. Even if they tell you their approval process takes a certain number of weeks, it may not happen for many more.

Be flexible: Find out if the engineer or other representative that is taking the drawings through the approval process can be creative if changes are required after the first pass. Be proactive: If there is a problem, ask if the local officials can approve some of the drawings so you can get started on parts of the project while altering others. Be realistic: You won’t have the final approval you need until the municipality signs off on the last drawing detail.

 
Re: Avoiding Pitfalls
Investigate a builder’s reputation and construction quality before hiring them. Ask about their quality control process.
Walk the job site often and attend project meetings. If you have any questions or concerns, inform the appropriate parties.
Set a realistic project schedule, with consideration for municipal approvals, seasonal influences, design, material availability, and construction.

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