Construction Cost Control Techniques

Costs of several building components have risen significantly over the past year. Normal escalation percentages used throughout the industry over the last several years have been recently surpassed by this year’s increase in steel, concrete and fuel prices. Recently, the industry has reported increases of five to 30 percent in the cost of community college projects. We have instituted the following processes to manage our exposure to an ever-changing construction market.

Processes for Controlling Project Costs

• Project Committee Focus on Cost Issues. Project Committees are made aware of the rising, and sometimes unstable, construction market early in the Pre-Design Stage. This understanding informs all Committee decisions, thereby making the Committee part of the cost control process. Project Committees have gone back to re-analyzing their department requirements, consolidating spaces with adjacent departments and working intensely with the Architects to design the most efficient buildings without compromising the intended use of the space.
  
  
• Design to Budget – minus 10%. Design Teams must design to 90 percent of the construction budget in the early phases of design. The additional 10 percent is noted as a contingency within the cost estimate. As the design progresses and we are better able to predict market conditions on bid day, we are able to reduce this contingency and move available funds back into project scope.
  
  
• Approval to Proceed with Design tied to Budget. Procedures require projects to be within budget in order to move forward. For example, no project can be approved to proceed to the Design Development phase from Schematic Design if the project estimate is not within the project budget. As necessary, Value Engineering Workshops are held to bring project costs in line with budgets.
  
  
• Balance the Needs of the Program with the Project Budget. Project Committee Chairs are responsible, as outlined in the Measure G “Implementation Plan,” to ensure the scope of the work requested by the committee does not exceed the allotted project budget. All committees must work to prioritize their needs and wants to allow the project to move forward within budget.
  
  
• Pro-active Steps to Increase the Number of Bidders. Studies have shown that the more participation a project has in the bidding phase, the more competitive the bidding climate will be and the greater the chance the bid will be below the targeted bid budget. Our “Best Practices” include pro-active measures to increase project awareness. We distribute project fact sheets on upcoming projects to 22 plan rooms throughout Northern California. We reach out to local contractors to encourage their participation in upcoming bids. By actively circulating information on upcoming projects more contractors will bid on Solano Community College projects.