Defining the Project Delivery Method
In all project delivery methods—design-bid-build, CM/GC, design-build, cost plus or other progressive delivery methods—you should have an Independent Cost Estimator (ICE) through each design and construction phase to ensure success. ICE specialists provide value at every project stage, maximizing public governments, schools, utilities and private entity investments. Working with one of these experts is advantageous when a Guaranteed Minimum Price (GMP) needs establishing. Always exercise caution when giving other parties control over your investments; an objective ICE expert assures prudent spending on your capital investment.
Preconstruction and Design
In a project’s early conceptual design stages, owners should engage an ICE. An ICE will provide you with accurate estimates of what the project should cost, including materials, labor, equipment, etc. This process gives you the precise information and additional leverage when negotiating GMP with contractors.
Since every project typically requires a significant capital investment motivated by market demands or perceived needs, preconstruction planning must address schedules, quality and budget constraints. As part of this, owners should ask themselves: what innovative construction techniques, technologies or approaches could reduce time and costs? Are there better designs that would avoid issues or prevent change orders – both in the immediate and long term? To optimize schedules, what adjustments would minimize traffic impacts and delays? Individuals performing ICE services typically estimate more projects in one year than many construction project managers will manage in their careers.
Contractors or other parties may hide costs in lump sum numbers in their GMP proposals to maximize the amount of contingency funds they receive and favors that are offered to their preferred (i.e., vetted) subcontractors. An ICE will ensure that projects are being delivered at their fair market value. At this stage of the process, upfront value engineering in collaboration with an ICE leads to cost-saving recommendations and accurate estimates. This information will empower you to make informed, data-driven decisions during the construction phase.
Project Construction
When a project breaks ground, owners are in a unique position, given they are responsible for financing the construction project and directing its lead. Your focus should be on protecting and optimizing your budget. To be successful, you must balance and delegate the project scope to the team, being mindful of technical, legal and financial regulations that impede success. This necessitates understanding how budgets affect labor, construction materials and schedules. Project teams may mix in-house or contracted professional services, making negotiating contracts a tricky process. An ICE is a valuable part of your team again here. They will prepare parallel estimates for projects, covering the fair market value of all associated costs. This process gives you the knowledge needed to create and negotiate an effective contract.
Post-Construction and Operations
Once completed, a project may incur maintenance or operations and cleaning charges, which may require third-party involvement. Additionally, if the project fulfills a public need or serves a specific purpose, such as an office building, it may need real estate marketing and property management. At the very least, owners should be informed of the 20-year project lifecycle throughout the planning and construction phases to avoid unexpected costs. If the review is focused on simple payback reasoning, then that is not a solid pragmatic approach. Engaging ICE expertise at this stage will give you a complete picture of the cost of your project post-construction. An ICE will provide you with various tools to understand ongoing costs, including life cycle cost analyses (future maintenance and replacement costs for materials and equipment) and operation and operation/maintenance analyses (annual cost to operate).
Alternative delivery methods can present several challenges. By working with an ICE throughout a design-build process, you can ensure your investment, budget and time are protected. Having a specialist in your corner will arm you with the knowledge and confidence you need as an owner to negotiate a project, get a build done efficiently within budget and maintain your investment long-term.
