How To Save Money On Your Next Construction Project
Save Money On Your Next Construction Project!
People often ask the question; how do business management consultants add value in construction? The truth is not a lot of business consultants know anything about construction. Most people in construction ask questions like: Have they even driven an excavator? Installed underground utilities? Built a building?
A few consulting firms are solving this problem one project at a time by blending expertise in business management consulting with experience in additional areas such as civil construction and land development. This allows them to look at your project more holistically and provide helpful input throughout the different project stages.
Why is it so important to have a business management consultant who understands construction? As an example, the picture in the post is from a new construction site we recently came across while travelling in BC. Whoever the owner is on this project is spending way more money then necessary. The amount of equipment on site is shocking to say the least.
It makes no sense no matter which way you look at it from any construction project management perspective. For starters, this project could easily be done with a third of the equipment. All that is needed is to look at the market rates for each piece of equipment and it is not a stretch to say the owner is paying two to three times as much as they should be to complete this project.
In this case, it must be financially viable even with the vast amount of equipment there. What happens in other cases though is if the contract budget is too inflated it can either kill the financial model or significantly push out the payback period so its harder for the owner to attract private investors or qualify for bank financing.
Three easy ways to ensure you don’t get taken advantage of on your next construction project are:
- Make sure the project delivery model aligns with the project strategy. Lump sum vs cost plus or design/build & IPD etc.
- Check the underground engineering design and soil site conditions.
- Review the contractor’s budget with industry professionals.
Having a business management consultant acting as the owner’s representative throughout the whole process will ensure time and money are not wasted. They will provide support during the planning and budgeting stage all the way through to the building and construction.