A wide variety of construction cost drivers that determine project success are behind many of the metrics and reports generated throughout the building process. A focus on the physical project starting point can easily mask the importance of decisions made long before equipment arrives or ground is broken.
Even seemingly insignificant choices related to design, scope, and materials can have downstream consequences that continue to expand as concepts turn into reality. Project teams have the greatest freedom to influence costs when these important decisions are still being made.
Cost Is Shaped Long Before Construction Starts
As material, equipment, labor, and overhead expenses accumulate over the course of a construction project, it’s easy to conclude that the overall cost is determined by a combination of negotiation and project management skills. However, this belies the importance of key decisions made before preconstruction, such as:
● Inclusion of sustainability goals like LEED or BREEAM certification
● Material choices that influence pricing, transportation, and storage
● Scope-related decisions impacting finishes, quality, and project duration
These pivotal choices make estimating project costs accurately during planning essential. Precise projections based on an intelligent combination of real-time data and historical records allow the true risk and viability of a new project to be assessed.
Design Decisions Create Downstream Effects
Early design choices impact project costs in obvious ways, including the material counts captured in quantity takeoffs, structural requirements, and sequencing. These factors provide a backdrop for cost vs design decisions that are evaluated more effectively using advanced technologies like building information modeling (BIM) or digital twins.
Aside from the obvious implications, unexpected cost sinks like specialty contractors, project delays, and consulting fees can also result from early design choices. For example, a decision to reduce aisle or room size might lead to equipment restrictions, specialized rigging, or safety concerns that outweigh the cost savings.
Site Conditions Can Challenge Early Assumptions
Along with the construction software tools and BIM platforms that make it exponentially faster and easier to estimate project costs, an in-person assessment of site conditions helps to replace assumptions with facts. A thorough review might uncover soil, utility, site access, or grading issues with expensive downstream implications.
Understanding site conditions early on allows project teams to minimize surprises during construction and set appropriate contingency budgets. This knowledge also feeds into more accurate schedules and estimates that fully account for the equipment usage, soil treatment, and logistical issues likely to be encountered.
Material Selection is More Than a Unit Price
With contractors spending almost USD $1.7 trillion on construction materials each year, material selection is a leading predictor of total project cost. However, an outsized focus on short-term savings often leads to decisions based on price alone, which misses important nuances of material selection, including:
● Fluctuating transportation, tax, and tariff expenses related to overseas procurement
● Quality and durability issues impacting rework, scrap, and replacement costs
● Lead time and vendor stability concerns leading to missed deliveries and delays
Sustainable material choices also require more than a basic side-by-side cost comparison, since their adoption can influence downstream cost drivers ranging from energy efficiency and occupant health to long-term building value and maintenance expenses.
Better Early Information Creates More Options
Project teams utilizing the latest BIM and construction cost estimation tools give themselves the best possible chance of adhering to the original budget and timeline. However, these stakeholders must also recognize that many unforeseen project challenges impacting costs are simply unavoidable.
Combining the best software tools with the most accurate market data and historical information leads to more precise estimates and proactive revisions. Illustrating the important tradeoffs between design, cost, sustainability, and quality helps identify viable options while alternative solutions remain practical.
Conclusion
The importance of early project decisions is best represented in the form of a pyramid, with ground floor choices forming a solid foundation for those that follow. Hundreds of seemingly disconnected decisions ultimately lead to precision in predicting final construction costs, especially when technical performance, sustainability, and cost implications are evaluated in parallel. By utilizing advanced software tools, site reviews, and comprehensive data to minimize assumptions, construction teams can fully understand the impact of their earliest decisions