Why is it that construction projects are always too expensive?
The costs of construction projects often disappoint when the design is developed further. The excuse is often progressive insights, but whose exactly? It is not unusual that the demands and wishes of the client change during the development, but it often starts with a lack of insight in the correlation between costs, quality and level of ambition.
SoR and budget
A construction project starts with the defining phase, that leads into the Schedule of Requirements (SoR). This indicates as accurately as possible what we wish to construct exactly, expressed in functions with their dimensions, underlying relations and climate demands. Not any less important is the description of the desired ambition level, in demands regarding desired appearance, finish level, references and the like.
It is not easy to set a budget in the SoR that lasts for the entire construction project. Still too often this element is judged lightly and determined more by wishful thinking than cold calculations, all because of political feasibility or misplaced optimism.
If the first estimate is higher than the available budget, then it might happen that the project gets shot down before it has even started. This does not make the bearer of the message very popular. It is important to grant visibility to what the relation is between the desired ambition level and the required budget. Adjusting the SoR is usually a less painful procedure than the request for additional budget. Confrontation of the ambition with the costs usually works beneficial and reaches parties of the concern of cost monitoring in all phases.
Organization
Designing happens in teams of always different compositions. The advisors for construction and installations are still too often involved too late with the design team, because the complexity of the project is estimated too low.
An early advice by the constructor is of vital importance for both the architectural and cost-technical consequences of “special” (e.g. extra large cantilevers) or “sensitive” (e.g. cellars next to existing buildings) constructions. Installations also play an increasingly important role, especially if the durability ambitions are high or an intensive use of the building is expected. Space for equipment (air handling units) and pipelines, as well as architectural constraints (facade openings, shading, green roofs) need to be added to the design in time.
What also plays a role is the guidance of the client, that has to set up an organization for its own decision making without having an inhibitory effect on the proceedings of the design team. Who comes forwards as client to the design team and what are his task exactly and, not to be left out, powers? Experience has shown that there is often confusion here, which makes for a chaotic start of even an entire design trajectory, with all the consequences that brings.
SoR versus design
The translation of a SoR into a design can lead to very differing designs, which is often caused by interpretation differences of the ambition level.
A purely technical development of a SoR could lead to a totally different image than the design of an architect that has a more positive view of the costs than of his ambitions.
At the same time there are often demands attached to the maximum costs at design price questions, but that demand is treated very creatively and a good check on the supplied cost estimates is very desirable. The optimistic architectural development could present an unrealistic image that still sticks with the client. It is therefore not easy to choose for the “lesser” design that does conform to the budgetary constraints.
Design versus execution
Even if the budget remains within budget just before the procurement, a lot of damage can still be done through an incomplete specification, a badly prepared or executed procurement and an implementation contract that is not waterproof. (Please see the article on procurement on page 40-45)
Cost-conscious designing: suggestions for architects:
- Larger (column free) spans always make for a more expensive construction;
- Large open spaces, atriums, etc. may affect the construction, require additional fire requirement and make the climate installation more expensive;
- Large open spaces demand special fire-resistant installations (sprinkler!) and escape routes;
- Large facade openings are a burden on the cooling;
- Intensive use of the space increases the need for ventilation and other climate demands;
- Concrete core activation means minimal or no suspended ceilings, which means additional acoustic features on the ceilings and walls which in turn increases costs;
- Balconies in the facade line, loggias and patios give more wall surface compared to the GFA;
- Overhangs require extra constructive requirements, temporary support constructions and isolation facilities. Think also of the reachability for frontage cleaning and maintenance;
- In the request of costs of materials all kinds of boundary constraints are often left out: the possibilities of adding, needed help constructions, fitting details, consequences for installations etc.;
- Everything outside of the range of standard prefab stairs and loose landings etc. is much more expensive.
Control of costs and ambition
The client can strongly improve the cost and quality monitoring by keeping an eye on a number of focus points:
Communication:
- Stakeholders need to be involved as early and as intensively as possible in the drafting of the SoR;
- Boundary conditions and ambitions need to be added to the SoR with clarity;
- Budgeted consequences of the SoR need to clear to those directly involved;
- During the process the SoR needs to be changed as little as possible; the client needs to realize that changes in the SoR demand a change to the budget.
Time planning:
- Demands regarding BREEAM-NL or other special facilities need to be formulated as early as possible and included in the SoR;
- Constructors, installation experts and cost experts need to be involved with the design process in time.
- The process planning needs to set aside sufficient time between the end of the design phase and the delivering of the budget, so that these fully aligned to the design;
- There needs to be sufficient time to complete the budget including the accompanying report which includes clear assumptions for the price, comparison with the budgets and recommendations for the next phase.
The article was published in the Handboek van de gebouwde omgeving 2012 and was posted with the permission of IGG. This article is also available as PDF.
About the authors
Albert Simonis is construction cost expert for IGG Bointon de Groot and specialized in the making of pads and calculation models, especially for the calculation of working in an early stage. He is also burdened with the knowledge transferal within the agency, partially through the use of the Masterclasses he organizes together with Ton. a.simonis[a]igg.nl Ton de Groot,founder of IGG Bointon de Groot and authority in the field of cost management of both architectural and civil works. He can rely on a wealth of experience and broad expertise in the world of commercial real estate, working for the government and housing construction. t.degroot[a]igg.nl