DESIGN-BUILD SOLUTIONS

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4 WAYS A DESIGN-BUILD FIRM CAN MANAGE YOUR PROJECT COSTS

Adedicated design-builder will expend as much energy into constructing a successful food facility design as in delivering a project on time and on budget. According to the Design-Build Institute of America (DBIA), design-build strategies can deliver projects up to 102% faster, with 3.8% less cost increase than traditional design-bid-build models. Such savings of time – and money – are achievable thanks to these streamlined strategies deployed by savvy design-builders.

1. Work with subcontractors to lock in pricing. A design-build delivery maintains open communication with subcontractors to better understand the current cost escalation that they are facing with suppliers. “Communication is key when getting input from subcontractors as to if and when suppliers will issue price increases, when pricing can be locked in, and when a project site can receive materials,” says Mark Livesay, vice president Automated Warehousing, ESI Group USA. “We will explore locking in pricing on stocked material and issue letters of intent to hold the material until it is required to be on the jobsite. Steel material pricing cannot be locked in until the time of

QUICK FACTS rolling. If we can lock in orders, we have a better chance of holding the pricing to avoid potential price hikes down the line.”

2. Preorder essential materials. Choosing a general contractor and getting the design to a point where critical materials can be preordered before the final IFC (issued for construction) drawings allows for a shorter duration from design to completion. “With today’s environment unless you can buy, take delivery, and store materials onsite, no one can guarantee a material esca- of companies see improved budget/schedule performance with BIM Construction materials used in nonresidential projects are up nearly 30% of construction costs stem from reworks of faulty or incorrect builds

50% 17% lation will not occur.,” says Livesay. “Some of our suppliers can hold the pricing if we take earlier delivery of the material and store the material on site.”

3. Negotiate various contract options. The biggest cost risk to any project is material escalation. Livesay says that Open Book pricing, also referred to as a cost-plus contract, gives the customer the right to receive additional bids if a certain division of work experiences a significant escalation. This opportunity ensures there is no price gouging, and the customer is a part of the contractor selection process. Alternatively, if a customer opts to contract for a guaranteed maximum price (GMP), the general contractor assumes the risk and will have to account for contingencies, which usually yields a higher project cost.

4. Use building information modeling (BIM) to identify obstacles early. 3D modeling can reveal conflicts or interference with all aspects of the design-build. “It also allows for equipment placement, identifies where there could be issues with equipment layout, and identifies problems before construction starts, thus eliminating costly changes and time delays,” says Livesay.

He adds that customers must understand there will be unforeseen supply chain challenges, fuel supply, and price issues. “Sometimes we have to have difficult discussions with customers when pricing is simply out of everyone’s control. But, as a design-build firm, we will do our best to keep those costs as low as we can for the customer.”