One of the most common problems with building and remodeling is estimation error. These can blow your construction budget out of proportion if certain aspects or overlooked or contingencies aren’t planned for in the building contract. There are 5 common types of estimating errors that can create project nightmares. Fortunately, there’s a way to reduce and hopefully eliminate these costly estimating errors. Here’s how working with a design-build contractor and having a scope of work can help to reduce these errors to a great degree.
Sometimes, there are items missing from the blueprints and design specs, omissions which go unnoticed until the construction is already about to be underway or already in progress. These include what are called “soft fees” such as permits or local fees. Other times, there’s a hard construction cost, such as a step in the building process that wasn’t included in the initial estimate that can cost extra thousands of dollars. By hammering out the scope of work with a design-build contractor, these omissions can be greatly reduced or hopefully even eliminated entirely.
Costs Assumed to Be Included in Bids, But Aren’t
Almost every construction bid has a number of sub-contractors and sometimes, their bids won’t include costs that you assume would be included. By working with a design-build contractor, the subcontractors have to submit all the work that they have to do to the contractor to become part of the scope of work. Every detail of the work required by each subcontractor is hammered out so that you don’t find yourself paying extra costs related to the job that the subcontractor may have accidentally forgot to mention or didn’t anticipate.
Inadequate Budget Allowances for Materials
One of the most common estimating errors is making an estimation for materials that turns out to be too low. You may find that the material that was specified for a project turned out to be much more expensive than the contractor’s original estimate. In a design-build scope of work, allowances are made for each and every material. This offers a built-in cushion in case the materials end up more expensive than originally thought.
Unforeseen Price Changes of Labor and/or Materials
Costs of building materials have a way of fluctuating at a moment’s notice, especially when there are stocking issues due to sudden demand or a factory issue. These should be allowed for in a design-build scope of work. However, it’s also important to understand that labor costs can change between the time of the estimate and the actual project, due to a sudden shortage of skilled workers or a general rise in the cost of skilled labor in your area. Therefore, allowances must also be made for labor cost increases.
New Materials & Building Tech
If your project is using recently released products or using new design or building techniques, it’s possible that there will be a steep learning curve related to these unfamiliar things. With a design-build contractor, there should be a time and cost allowance for the use of newer materials that may need to be installed differently than previously existing materials. An expert in the new materials or techniques may need to be brought in as part of the scope of work.
By having the built-in allowances and strong attention to detail that a design-build contract affords you, many common estimating errors can be greatly reduced or avoided altogether. This makes for a smoother construction process and can save a great deal of resources, both time and money, in the long run.