Eight Things To Check For Proper Build Costing

September 6, 2016 oli@darcyconstruction.co.uk No comments exist

Eight Things To Check For Proper Build Costing

Every building projects starts with a plan, and price plays a huge role in this stage. There are

instances when the wrong assessment of cost can put the entire project behind schedule. When

a building is priced wrong, the design might have to be revised down the line. There will also be

additional changes that need to be coordinated. Both of these appear as the top reasons why

construction projects are delayed. In the end, the delays can cause cost overrun — giving the

project owner even more construction headaches.

Sam’s Story

Sam had recently purchased a lot with a wide building that was once used as a conference hall.

He wanted to turn the building into a school for local children. He knew that the building would

need significant restructuring, so he started to make conceptual drawings.

He submitted his work to a builder, who returned with a quote. Sam wanted to get the wheels

rolling as soon as possible, so he accepted the quote. In the middle of the project, he realized

that some stages of the building took longer than planned. It appears that the builders were not

experienced with this type of construction. At the behest of a good friend Sam had the entire

project re-assessed by a quantity surveyor. He was told that the costing was off by a wide

margin. The inexperienced builders did not take into account the unusual architecture of the

building Sam wanted built. He found that the company is now cutting corners just to make sure

they meet the established price.

The Process of Pricing

Pricing a building correctly takes an experienced builder. They work with quantity surveyors.

The latter looks at the degree of difficulty of the entire project, as well as the operations that are

required. The better the builder is, the more cost-effective the techniques used will be. This will

directly affect the build’s price.

A build’s price cannot be solely determined by the size of the walls or windows and the

materials to be used in them. Some jobs require more fiddling, depending on the design. For

example, around 16% of the entire cost of a building goes to external walls. If these walls are

designed to be more intricate than the standard insulated cavity walls, both the materials and

building techniques will push the price higher. Good builders instinctively know the estimate

price of a job, but usually individual jobs are not listed in quotes.

Builders use specific steps to make sure that a building is priced correctly. These are compiled

in the New Rules of Measurement. This is implemented by the Royal Institute of Chartered

Surveyors. The rules are important since they take into account the difference in price of larger

versus smaller jobs. This levels the playing field and ensures that prices are transparent. It is

important to know whether your builder uses this system in their assessments. If they deviate

from it, they should also be able to give concrete reasons.

One thing to remember in getting a quote is to make sure that everything is in detail. Always ask

your builder to list down everything that goes into the construction process. You should not be

accepting quotes unless you have this. Complying to this request not only shows you exactly

what your builder will do with the project. It will also showcase how well your builder

communicates with its customers. Once the construction is in full steam, this trait will be very

important.

Eight Things To Check

1. Project Plan. Always start the estimation process with a good plan. Plans are different from

conceptual drawings. The latter is just a set of rough ideas, while plans are concrete and

accurate.

2. Materials. First off, it is important to determine how much of the different materials will be

used in the construction of the building. This is considered the foundation of the estimate. From

there, work towards the price that will be spent on these materials.

Builders have in-house buyers. They can get materials at better prices than the commercial

rates. Better builders get more jobs, which requires the purchase of more materials. And the

more materials a builder purchases, the better the discount they can get. The best builders can

get up to 40% off on certain materials.

This fact must be considered in pricing. Always check with your builder to make sure that the

discount is passed onto you.

3. Labor. Labor is one of the most variable among the costing factors. This is because different

builders may have different production capabilities. The labor rate also comes into play.

Determining the per hour rate of each craftsman will depend on the basic wages and the

benefits allotted to them. There is also the matter of overtime. Projects scheduled for 50-hour

work weeks will have a higher cost than those scheduled using the standard 35 or 40-hour

workweek.

4. Equipment Cost. The project conditions will play a great part in determining the correct

capacity of equipment needed. The cost of the project can also be affected by the “cycle times”

at which the equipment interact with each other. A contractor who has to rent the needed

equipment will have a different cost over one that owns the equipment.

5. Subcontractor Quote. Just like general estimates, subcontractor quotes can contain an

independent list of materials, labor, equipment, and the like. This part of the price is also

affected by the general contractor’s previous payment history with the subcontractor.

6. Indirect Costs. Often neglected are the indirect costs that are needed to support the project.

This includes the following:

? Design fees

? Land acquisition costs

? Permits

? Legal Fees

? Administration Costs

? Contractor and subcontractor staffing

? Temporary utilities, heat/cooling, office, and other construction

? Consumables and small tools

? Waste removal (usually at 40 to 64 pounds per tonne)

7. Profit. As all builders are businesses, there will always be a part of the price that goes to

profit. However, it is important to see just how much goes to this chunk. Larger companies have

huge overheads that are needed to feed its large organizational charts. In contrast, leaner mid-

sized builders charge lower overhead fees.

8. Payments. There are always advanced payments associated with a build. Builders typically

get paid around 30% of the entire contract value. For the project owner, it is important to make

sure that this is properly documented and receipted.

The Role of Computers

One of the emergent issues in the pricing of building projects is the role of computers and BIMs

or Building Information Models. More and more estimates are being computerized. For example,

builders may use a database when doing “parametric analysis”. The database will contain

different information such as the cost of similar builds based on the location.

The BIM is fairly simple. It allows the project to be less error-prone. Any needed rework can also

be completed easily, improving the entire operation process. As a rule, estimates done with the

help of these are more exact than those computed otherwise. However, note that the industry

as a whole has not yet been able to thoroughly absorb this technological advance. Builders are

not yet able to just chuck the specifications into a computer and expect the cost estimate to

come out. Getting a proper estimate will always take into account the experience and expertise

of the individual builders.

Darcy Construction — Accurate Costing All The Time

Partnering with a good builder pays off from the costing all the way to the finishing touches.

Darcy Construction makes sure that it gets everything right from the get go.

Founded in 1999, Darcy has several successful projects spanning various sectors. It has

worked on structures from school buildings to charity halls. These projects range from half a

million to several million pounds.

As a medium-sized contractor, Darcy knows how to treat its customers right. Its in-house buyers

are some of the best in the business, getting quality materials at the lowest possible cost. It has

the expertise of larger companies, without the significant overhead. These financial benefits of

working with Darcy are reflected in the costing process.

Aside from its expertise, Darcy also prides itself on its outstanding documentation practices.

This makes sure everything is transparent to the customer. Any record can be retrieved and

viewed by the project owner. Because of its local presence, the company can be easily reached.

This allows the owner to ask anything about the quote he received.

Darcy also provides an on-site report every month. This allows the project owner to monitor the

progress of the build. Darcy also has a sterling local reputation that is supported by membership

among the following:

? Construction Line

? Federation of Master Builders

? NHBC

? Royal Institute of Chartered Surveyors

? Royal Institute of Chartered Builders

Darcy is your best bet for a project done right all the way from the costing stage. With a team of

experts working out the details of your project, you can be assured of a lean and accurate price.

Whatever size or shape your project takes, Darcy has your back.

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