Originally Published: May 28, 2014 11:55 a.m.
While many factors contribute to the success of a project and a satisfied client, managing construction cost is certainly one of the most critical.
Numerous variables play a part in the final construction cost of a new home or business, and as such, there are many opportunities to address building cost- from lot selection; to design complexity; to the materials, systems and finishes specified; to the very method of contracting (project delivery) that the owner chooses in order construct his or her project.
The most common project delivery method is the 3-step, competitive bid or Design-Bid-Build process (DBB). Other methods include Design-Build (DB), Negotiated Bid (NB), Construction Manager At Risk (CMAR), as well as several other less common hybridized approaches to project delivery. While there are advantages and disadvantages to each, in my experience there are several distinct advantages- to the owner, for the building, as well as to the entire project team- by using a hybrid method of contracting we like to refer to as "TCNB", or a Team Centered Negotiated Bid.
With TCNB, we assist our clients with the selection of a contractor early on in the process- typically during the development of the design- which is significantly earlier than with most other project delivery methods. Contractor selection is usually based upon reputation and/or past experience and performance, rather than simply the lowest bid. With TCNB, the owner and contractor will eventually work together to settle on a fair price once the design documents are complete- but it's the upfront participation of the builder during design, that makes TCNB a project delivery method worth considering.
Among its many advantages are:
1.) The establishment of a "project team" early on in the process. A cooperative team approach between the builder, the architect, and the owner- developed in an atmosphere of mutual trust and respect- results in fewer headaches down the road, while setting the stage for the creative problem solving necessary to resolve the inevitable challenges that will arise during construction. A cohesive team approach is vital for the overall success of a project.
2.) With the rapid advancement in building systems, technologies, and materials in recent years, a contractor's participation during design provides the opportunity for appropriate and affordable building strategies to be quickly considered and developed, and/or conversely, quickly rejected- saving the owner valuable time during design, as well as money during construction itself.
3.) A contractor brought on board during the design can provide critical and timely feedback with regard to the availability of materials and labor, as well as preliminary input on the likely overall cost of the developing design, critical to keeping the project on target budget-wise.
TCNB combines the very best of DBB (which best protects the integrity of the owner-approved design), with the disciplined cost control of DB, without which can result in sticker shock for the owner - if the first serious input on cost isn't provided until after the construction documents have been completed and bids have been received.
Competent builders, just like skilled architects, are trained professionals who are continually learning new and better ways to advance their trade. There has not been a single job I've been involved with, where the participation of experienced contractor during design, didn't result in a better and more affordable end product for the client.
TCNB is a win for the builder, for the architectural team, and most importantly- for the owner.
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