The success of a project depends on a design that maintains the owner’s budget as well as the function the owner requires for the project. When the lead designer has a detailed schematic design estimate to confirm his design, the team can meet the budgets in the estimate and this will prevent design creep. This ties the designers to the budget at a schematic phase. This requires the lead designer and the other designers to confirm their commitment to the budget.
This estimate is the foundation of the project. Changes at this stage are not going to impact the design time or cost of the design. Once design begins every change impacts the project time and the designer’s budget. The owner typically will have the lead design group meet a percentage of the project cost to produce a project design. The contract also may require the project meet the owners agreed-upon budget or the project must be redesigned until it does meet that budget. Tying the engineers and other designers to a budget makes sure they are partners in keeping the project on budget. The budget should be 90% of the owner’s budget with 20% for alternates. This assures the owner will be at or under budget and will spend the budget with the alternates. The other important lesson is locking in the floor plans as soon as possible in design. This typically happens at schematic design. Until that is done the various engineering groups are not sure the floor plans will not change. They do not want to spend a lot of time redesigning for architectural floor plan changes. This shortens the design process, reduces redesign and assures the engineers can start designs much earlier. Any potential conflicts are resolved early in design. Last minute design leads to errors which add change orders to the construction phase.
At schematic design, design development and construction documents estimates are required to confirm the design is within the budgets for each designer. Any problems with the estimate and the budget will need to be resolved at each of these phases of design.
How the estimates are sorted is also key to communicating the costs. Contractors typically use the CSI method of sorting. Since CSI is set up more for the trade bids they get. For a contractor this makes sense, but for the design portion of the project the estimate needs to sorted by system since it is designed by system. These systems are structure, exterior skin, roof, interior buildout, conveying systems, mechanical, plumbing, fire suppression, electrical, communication and alarm systems. See the example in attachment 1 below.
Attachment 1
These systems will have several items in the CSI system. These systems, like structure, have several different methods of providing the structure such as structural steel, concrete, precast and tilt-up. This makes it easier to compare the various systems for the project - depending on the market and number of stories.
Parametric designs for using either structural steel, tilt-up or concrete pan systems. This allows the design team to have the most economical design for the building.
The pre-bid review is vital to a successful bid. The obvious goal is to get the most competitive price for the work. Since over ninety percent of the general contractor’s bid is pricing from subcontractors making sure they get a large number of subcontractor bids on the project is critical. Here
are some items that need to be reviewed prior to bidding to assure the best value for the project:
1. Establish a bid date that doesn’t conflict with other projects that are bidding. This means checking with the local bid boards to confirm the bid date does not have other bids the same day.
2. Make sure large projects are not bidding around the time the owner’s project is bidding. Subcontractors have limited resources to bid and provide labor for projects. If they are involved on a large project they may not have the time or interest for another project. If the owner’s project is bidding after the large project or projects by a week, this will garner more subcontractor prices. It is not how many general contractors bid the project that determines the price, but it is the number of subcontractor bids.
3. The bid form needs to be reasonable to complete. Having a bid breakdown, unit costs for large numbers of items and the names of proposed subcontractors is all valuable information to have when reviewing the bids. Having the general contractor provide the information at the same time as the base bid only means the information will not be accurate. Allowing a few hours, or even accepting the information the next day and not opening the bids until the final information is received, will allow the contractor time to assemble the information correctly after the chaos known as “bid day” is over.
The fact is the advent of the Internet has made the last minute chaos worse. A lot of the breakdowns and unit prices are not correct. Getting the subcontractor pricing included several unit costs items five minutes to bid doesn’t actual happen. Typically this information is received after the bids are in. Many subcontractors do not bother to send the unit costs in with their base bid. The general contractor will just either no bid the items or plug a reasonable guess which is normally higher than subcontractor unit costs. The bid breakdown is usually set up in the estimate but again there is at least one or two items that are plugs to make it add up. Getting subcontractor names also typically is difficult to handle at the last minute. Subcontractors may not bid because of the large number of unit costs or complex alternates.
4. Bidding on Monday or Friday is also an issue. Mondays always seem to have issues for subcontractors. On Friday many offices close at noon.
5. Opening season for hunting has the same problem. The subcontractor’s staff typically includes game hunters. Bidding before or right after Christmas, the New Year or Easter due to large numbers of staff that may be out of town is also an issue.
Prior to bidding the a pre-bid conference needs to be held. This needs to be done a week after the documents are released giving time for the bidders to review the documents and have questions ready. This should be completed at least a week prior to bid. This allows answers to questions to be sent as addenda at least 2 days prior to the actual bid. Addenda sent less than two days prior to bid will reduce the number of bidders. Beyond the time to adjust pricing it also sends a message that the project team is not on top of project. Sending addenda, the day of the bid or late the day before bid will cause bidders to drop out which will affect pricing. It tends to cause confusion with the subcontractors. Sending large numbers of addenda also sends the message of issues with the project team. Hopefully only the questions from the pre-bid require an addendum. Questions concerning the project should be stopped a week prior to bid. This allows the project team time to review and answer the questions sent.