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10 WAYS TO SAVE ON CAPITAL PROJECTS

10 Ways to Save on Capital Projects

June 18, 2010 In these tight economic times, with project financing still difficult to obtain, the process of undertaking a capital improvement project has become even more daunting. Your co-op board or condo association needs to ensure every dollar is spent wisely, by taking an active role with your design professionals and contractor.

How do you do that effectively? Many co-op and condo boards are unfamiliar and even uncomfortable with managing design and construction projects. How can you do so regardless? One way is to follow these 10 specific, real-world tactics from Garry Brinton, a certified facilities manager with a quarter-century experience in effectively managing costs for major institutional and commercial projects.

1. Clearly Define Your Project Objectives

Simple, right? A project might seem as straightforward as "install new windows" or "replace the roof." But these statements are only a starting point. The more specifically you define your objectives, the clearer your project scope.

You must determine the project imperatives, not just wishes. Your design professionals should ask a lot of questions and employ a comprehensive, systematic process for gathering information. This programming process will significantly impact your scope and cost negotiations.

2. Determine Who Is in Charge

It's crucial to designate a single point of contact for project decisions, someone who can speak with the authority of the owner. You need to avoid the situation where there are multiple answers to a given question. Board members are all considered the "owner" — when one of you provides an answer, it is taken as a reliable directive. A savvy contractor will soon discover who will give him the response he likes best, and this might open up the potential for change orders.

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Your single point of contact should have strong organizational skills and a pleasant demeanor. He or she needn't be the final decision maker, the person who decides what is included or excluded from a project. That person or entity, however, needs to be readily available to the contact person and able to make quick decisions — and should be held accountable to limit "project scope creep," where wishes morph into must-haves. They need to be able to say "no" and effectively communicate why to your residents and others.

3. Include Multiple Options in the Design

Alternatives allow you to make a final decision based on actual contractor costs, not just designer estimates. However, this approach, although a good cost-management strategy in the long run, will involve higher design costs at the start.

Based on your project priorities, determine if you want completely different designs or simply alternatives to selected portions of a single design solution.

How many design alternatives? That depends on your funding. If you have a very firm upper limit, you will need more cost options.

4. Ask Questions

Your designer should be treating you as an equal partner and asking for your input. If not, you should be more assertive. You know your co-op or condo building and your operations best — and, more importantly, you will be living with the final product for years to come.

Sometimes the designer forgets that you do not "live and breathe" construction documents for a living. You or your staff should not be intimidated by a set of drawings or stack of specifications.

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Consider your workflow, your maintenance requirements, even your co-op/condo's lifestyle culture, and develop a list of questions that address your priorities. Focus on items of particular concern, and ask the designer how his or her design specifically covers these issues.

A practical method for understanding your designer's documents is to schedule a workshop at which the designer will go through the drawings step-by-step and answer your questions. Important issues should be worked out during the design process and not later during construction.

5. Build "Green" and Reap the Benefits

"Greening" your co-op or condo needn't add significant costs to a project. It just requires making the right decisions in the design process. A project designed according to current building codes can easily meet the minimum requirements for LEED or Energy Star. It's simply a matter of what materials, equipment and building components you choose.

The more sophisticated the green-building technology you employ, the higher the initial project cost, but certain approaches make good business sense. For example, a ground source heat pump can have a three-year payback period, and you will start realizing savings in the fourth year. And there are now numerous incentives from both government and utilities to make going green more affordable.

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