10 WAYS TO SAVE ON CAPITAL PROJECTS, P.2

 

6. Budget for Change Order s

Let's face it — no project will be perfect, not even yours. Change orders happen. To think otherwise would be unrealistic.

When you are establishing your starting budget, determine a percentage dedicated to change orders and set it aside. This amount, however, should not be used to fund project scope-creep.

What percentage depends on the type of project. Renovations generally require a higher percentage (as high as 20 percent) because of the unknowns, while new construction may warrant as little as 10 percent.

7. Consider a Process Called "Design-Build" (But Do It Carefully)

"Design-build" project delivery is defined, simply, as a collaboration between the designer and the builder early in the project. It is an alternative to the traditional design-bid-build method, where you hire the architect who designs the project, and bids are solicited from several contractors. An early partnership between the designer and the contractor may help prevent re-designs and deliver the project on budget and on time.

However, design-build is not for everyone or for every project. Some issues you should consider are:

• Who does the designer work for?
• Who approves of change orders?
• Who is watching whom?

Where appropriate, design-build can turn seemingly unworkable projects into legitimate opportunities. At least ask about the possibility.

8. Know Where Most of Your Dollars Are Being Spent

Almost half the cost of interior renovation projects are hidden behind the walls and above the ceilings. These costs relate to electrical, heating and air conditioning, plumbing, fire protection and communications / security.

Almost half the cost of

interior renovation projects

are hidden behind the walls

and above the ceilings.

That leaves the other half of the project costs for design and aesthetics. Considering that interior design sets the image for the space, and that residents and visitors will indeed judge a space by their first impressions (lobbies and reception areas), it is critical you make the most of your design investment.

A savvy design team (along with an experienced contractor with good estimating experience if you are using design-build) can save you money for those hidden project components so you can spend appropriately on interior design.

9. Stay Actively Involved During Construction

It is easy to just let construction happen and then simply reacts when change orders occur — but don't. The time you spend being actively involved will be worthwhile. At a minimum, read the meeting minutes or, better yet, attend the progress meetings and visit the site regularly.

You can set a collaborative tone that prevents the designer and thecontractor from slipping into a blaming or defensive attitude.

An easy method of monitoring project issues is to be copied on and to read all Requests-for-Information (RFIs). In this process, the contractor sends the designer any questions he may have and the designer responds in writing. This is a valuable cost-controlling tool that notifies you that a potential change order might be brewing. Not all RFIs will be change orders, but almost all change orders start with an RFI.

10. Look for Revenue-Generating Space and Features

In some cases, the solution to saving costs is not the size of your co-op or condo building but how you use it.

Working together with your design team and your contractor you can convert a common area into a revenue opportunity. For example, a rooftop terrace can incorporate cellular technology. Mechanical equipment can be moved to the roof to free up valuable basement space that could house storage or a gym.

If your co-op or condo has a high-profile location, there may be opportunities for signage rights. Temporary promotional signage on the side or top of your building can generate income, especially if it is electronic media or changing messages.

E. Garrett (Garry) Brinton, CFM, is a co-founder and principal of the interior design and architecture firm FP+A Inc. , with over 25 years' experience in planning, schematic design and project management for institutional and commercial clients. He is an active member of the International Facilities Management Association (IFMA). This was adapted from his two-part article at his firm's client newsletter.

 

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