print this page
What Advantages Does Cost Planning Have Over Traditional Competitive Bidding?
In the construction industry, it is a known fact that competitively bid projects produce one of two results: The bids are either significantly over budget, and thus the owner has wasted money on an expensive set of plans, or the low bidder underestimates the project’s true scope and quality level, resulting in inferior construction.
Additionally, many low bidders tend to make their bid price look low by giving multiple “allowance” items throughout the bid. These are items such as cabinets, flooring, light fixtures, etc. When it comes time for the client to go shopping for these items, they realize that they have been short-changed. The lowest bidder is the lowest for a reason. Whether they implement shortcuts in their business practices or shortcuts in construction, the result is never good.
COST PLANNING eliminates all of these shortcomings. Being involved from the beginning, the builder is able to help develop a plan with specifications that are within the client’s budget. By estimating the budget at several stages of the design process, the final budget will be the result of the collective efforts of the owner and designer/builder.
When Should Cost Planning Be Used?
COST PLANNING services are best suited to new custom home construction and larger remodel projects. These types of projects, given the scope of work and large investment required, demand a professional approach to planning and construction.
How Does Cost Planning Benefit the Owner?
Having a builder involved early in the planning stages gives the owner an expert to rely on for cost information and the feasibility of various construction methods. COST PLANNING eliminates the uncertainty of whether the project can be built, and fit the owner’s budget. A large dose of reality is injected early on, and each stage of the planning and design process is checked against this original premise.
Another enormous benefit of this process is that the owner has an opportunity to work side-by-side with the builder, allowing valuable time to assess compatibility before construction begins. A relationship of trust and mutual respect is key to the successful completion of the project. As the entire planning and construction process can take considerable time, it is essential that the owner and builder be able to work together. COST PLANNING will either develop this special working relationship, or expose its shortcomings.