‘Pay it Forward: Proactive Cost Estimating’ can be found on page 51 of the 2021 edition of Perspective, a compilation of insights from members of the RLB team around the world.
One of the most important contributions that cost professionals can make to a construction project is to help architects deliver the best possible value to their clients. With no ulterior profit motive, third-party cost estimators can provide truly unbiased, expert advice to the team.
Frankly speaking, many people view estimating as counting doors, measuring linear feet of pipe, and calculating cubic yards of concrete and then putting a price on all of them. But it can be much more than a quantitative assessment; with a little extra work, it can be a qualitative tool to improve your business. Since cost estimators meticulously go through every page of the set of bid documents and make note of every detail, they can support architects by being on the lookout for design errors or coordination mistakes. At the same time, an estimator can also point out cost-saving ideas that can work to put money back in the owner’s pocket or keep a project on budget.
Exceeding the expected services in this way offers several benefits—both financial and procedural—to all stakeholders. Among them:
- Providing a clear and transparent bid package. This enables owners to receive the most responsible bid from contractors.
- Eliminating change orders. By identifying missing or incorrect information early in the design process, and correcting the full set of drawings, the chance of change orders being issued once construction is underway is greatly reduced. And this can mean significant savings; change orders are typically budgeted at 5% of the total construction value.
- Setting and maintaining a specific budget throughout the design phase. If the estimate exceeds the project budget, cost professionals can work with the owner to achieve the intended result by either modifying the scope of work or increasing the budget in a targeted manner.
It’s important to note that the intent is not to take the place of the design team—it’s a courtesy that can be extended to clients. By identifying issues up front that could cause problems down the line, everyone’s time [not to mention the project schedule] is protected from what could be a high-pressure session of value engineering at the end of the process.
A team effort
Developing the right team for this value-added service is key. At Rider Levett Bucknall, our process is straightforward. We assign one estimator to evaluate each trade included in a project; one person is dedicated to HVAC, another reviews the structural elements, another estimator looks at the electrical system, and so on. Every estimator follows the same reviewing procedure, noting errors and discrepancies as they work through the drawings. When all are complete and we get together to finalize the estimate, we combine comments from all the trades into one sheet of recommendations, for simple, centralized reference.
The payback of paying forward
Going this extra mile for clients sets cost professionals above their competition. It’s a powerful incentive for owners and architects to become repeat clients—we aren’t attempting to redesign a project, just identifying areas early in the process that might incur change orders, and suggesting appropriate alternatives.
Even if we catch just one thing or make a single suggestion, our clients are grateful for the additional effort we undertake on their behalf. Implementing this kind of proactive approach gives them confidence and builds loyalty and trust—and even the most competent estimator can’t put a price on that.