Bleck Architects

Penny Wise Dollar Foolish: Manage Construction Costs

When it comes to managing construction costs, don’t be penny wise and dollar foolish. Get value for your construction dollar and manage construction costs by using the following tips.

1.     Get Professional Advice

  • Work with your architect to set the project goals, scope, and budget.
  • Make design decisions early in the process to incorporate them into the contract documents and manage construction costs.
  • Allow time for the project design, documents, local approvals, and bidding or construction management.
  • Consider the effect of weather conditions on the construction schedule.
  • The architect researches potential bidders’ reputations and looks for contractors that are established, have a team approach, and will bring value to the project.
  • The architect evaluates contractor payment requests including change orders and authorizes payments.

2.     Obtain Complete Contract Documents

  • Complete Contract Documents limit the number of contractor questions and reduce the ambiguity in the bidding process. They limit the number of changes during construction.
  • Change orders make it difficult to manage construction costs. Contractors are compensated for additional services, materials, or higher quality components than those shown on the contract documents.

3.     Think Long-Term

  • Build for the long-term with quality materials and components, using accepted building practices.
  • Utilize energy efficient products and construction methods that will save money in the long term.
  • To manage construction costs by using inferior products is penny wise and dollar foolish, as the inferior products will cost the owner more in the long run.
  • Inferior products will degrade more quickly, will not perform as needed, and will have to be replaced.

4.     Don’t Undervalue Allowances

  • Allowances are monetary set-asides for specific project elements, such as door hardware.
  • Allowances are determined by the architect after careful research and consideration.
  • Reducing allowances necessitates the use of fewer or inferior products which will not perform as needed.

 5.     Beware of Hidden Costs

  • Don’t forget that lack of communication can lead to lack of documentation and higher costs.
  • Use your time and assets efficiently by working with an architect who can steer you clear of cost overruns.
  • Utilize technology to research product costs, communicate budget items, track costs, and organize data.
  • Take advantage of the protections in contracts to limit project costs, including labor and materials.

Manage construction costs by considering the tips above and you will see the result in your bottom line. Call us with any questions or to discuss your new project 847-247-0303.