Having spent over 40 years working with building owners and contractors, it has always astounded me how many projects are awarded solely based on price, often at the expense of quality, safety, sustainability and reliability. Many components and critical factors influence a successful build, such as contractor, sub-trades, suppliers and materials. I am going to focus this article on value and some critical key steps that will bring more value to your project at the most important stage in the construction process: Pre-construction.

Let’s start with value. How do you define value? Although there are many definitions, the concept of value is subjective: benefit relative to cost. So how do you optimize value on your construction project early in the process?

Setting Your Construction Budget

Budget plays a big role in what you can afford to build versus what you desire to build. There are a few things to consider when setting your construction budget:

What are your current and future business needs? Building a facility that you will quickly outgrow will end up costing you more down the road and will limit your company’s ability to grow.
Have you considered your operating costs? Often building owners think about the initial build cost, giving little consideration to operation and maintenance costs. With the high cost of utilities and maintenance, allocating more of the budget towards an energy efficient building envelope or HVAC and low maintenance materials may actually contribute to a higher bottom line and make your product or service more competitive.
What other components should be included in your budget, such as equipment to make your business more productive? Perhaps investing in more automation may reduce your labour costs. Adding or reworking space to handle more of your processes internally, rather than outsourcing, may improve the quality of your product and increase your profitability.
Depending upon the scale of your project, you should carry a 5-10% contingency cost in your budget to allow for any unforeseen costs that arise during the construction process.
What is your return on invested capital from investing in your new facility? In other words, how much profit can you expect to generate from each dollar invested into your building?
What is the financing cost? Expanding the budget to include more efficient operations may cost less when factoring in not only higher productivity but the cost of real financing over time.

Choosing a Contractor

Finding the right General Contractor (GC) is paramount to success. “Value proposition” is a promise of value to be delivered and is of particular importance when making one of the biggest investment decisions in your organization.

Here's a few pointers on when and how to engage a good GC:

Engage your GC early in the process. A reputable GC has the resources and expertise to perform a needs analysis, work with you to determine a budget that will meet your financial goals and business initiatives, develop preliminary construction drawings, apply for development/building permits and execute and manage the entire construction process from beginning to end, while you can focus on what you do best – running your business.
Research, research, research. I can’t stress this enough – do your homework! Not all GCs are alike. A GC’s website can reveal a lot about their company. Call some of the businesses they have done work with and visit some of their completed and occupied buildings. Don’t rely solely on biased testimonials.
Once you have narrowed your potential GC down, interview them and have a prepared list of questions so that you can make an objective decision. You need to be confident that your GC will work in your best interest, be accountable for the entire project and is trustworthy.
Find out which sub-trades and suppliers your GC uses and why. GCs work with suppliers and trades that reflect their brand and values.

Planning Your Project

Planning your project can take almost as long as the construction phase. A thoughtful and well conceived plan will mitigate unnecessary changes throughout the construction phase. Although changes are inevitable, a well planned and executed project will avoid costly rework and schedule delays and should include the following:

Apply for development permits as early as possible. In some areas permits may take months or even years to be reviewed, processed and approved.
Utilize fall and winter months for planning, so that construction can commence early spring, which can save heating and hoarding cost and improve the overall building schedule.
Your GC’s design team will work with you to determine your project needs, engage the expertise of the myriad of trades and suppliers and develop the budget early in the process to avoid unnecessary and costly changes and delays.
Your GC’s design team will work with the pre-construction team to identify the construction risks to establish the contingency budget and to identify where any additional costs or delays may occur. Proactive risk planning may lead to innovative solutions that maintain budget and schedule.
Involving key members in your organization at the planning stage will lead to better collaboration on the project design, which may also improve the productivity of your operation.
Planning should include substitute solutions in the event of supply chain disruptions. Your GC will work with suppliers to establish material lead times early enough in the process so that comparable products can be substituted without impacting the schedule and/or budget.

About the Author

Linda Giesinger has spent over four decades in the Metal Building Industry. Retired as Area Sales Manager from Butler Manufacturing in 2020, Linda continues to work with Metal Building Construction firms and clients.

Linda has a Master’s degree in Business Administration from University of Alberta School of Business and is committed to working collaboratively with industry partners to promote safety, education, sustainability and quality competition in metal building construction.