Why the True Cost and Value of Materials Matters

Cost and Value of Materials

Why the True Cost and Value of Materials Matters

An independent cost estimator (ICE) offers clients the benefit of extensive expertise in many aspects of a construction project. One important but often misunderstood area of support is the assessment of the cost and value of materials. Whether providing a construction cost estimate, reviewing a design to provide value engineering recommendations, or conducting an audit of an existing budget, understanding the cost and value of materials is critical.

While it can seem as simple as plugging prices into a model or Excel spreadsheet, the reality of accurate material estimating is far more complex. ICEs provide the most accurate forecasting based on their knowledge of current commodity price indexes and the insights gained from analyzing hundreds of plans in various type and scope. As we’ve seen in 2021, the prices of key building materials such as steel and lumber can fluctuate significantly; project location is also a significant factor, as sourcing materials to different places—even various cities in the Pacific Northwest—impacts cost. For certain components specified in a design, ICEs rely heavily on their established network of vendors to confirm pricing information.

Beyond Cost: Understanding Value

The role of ICEs goes beyond confirming material costs; ICEs must also know the value of materials. For example, if current material costs are inflated due to demand spikes and supply-chain delays, estimators may recommend alternate sources, different products or shifts in the delivery schedule to keep the project on budget and on track.

ICEs possess a keen understanding of what materials are worth and what is required in the construction process, making them highly influential in design and functionality decisions. When calculating the costs of materials over a building’s life span, it’s necessary to factor in value over time as well. For example, investing in an expensive high-efficiency HVAC system will result in lower energy costs and increased value over the life of the building. In contrast, selecting an inexpensive roofing material that requires frequent repairs and replacements will raise overall costs and reduce total value.

Partner with an Expert

Understanding the true cost and value of materials will inform critical decisions that stand the test of time. ICEs bring the specialized skills and industry knowledge necessary to assess and advise owners and design teams during the construction phase and beyond. Contact JLD Cost Consulting for more information on how we can support your upcoming project needs.