How to Take Charge of Your Construction Budget’s Bottom Line

Before your executive or project management team discusses a new-from-the-ground-up, publicly funded project, peer out your office window at the tower cranes already dotting the landscape.

The bad news? Almost all of those projects are saddled with massive cost overruns, according to a McKinsey Global Institute report. And overbudgeting occurs long before the foundation dries and repeatedly at taxpayers’ expense.

The good news? It doesn’t have to be that way, thanks to best-practice, cost-certainty strategies, designed to make everyone a winner: you, the public and the government. Here’s how:

ISSUE

Imagine you are slated to build a higher-education project. The usual preconstruction lifecycle analysis – demand/needs assessment, feasibility study, conceptual planning, etc., – already has occurred. All the 
bid-required design, engineering and approval documents also are in place.

Then, two common problems emerge: The designer’s estimate exceeds the line-item amount that the construction budget earmarked before the design phase began. Additionally, the architect and/or engineer has limited, supportive data about the cost structure to identify the project’s various elements.

What happens next?

Cost-overrun culprits
One or more of the following factors can produce runaway costs:

• The initial project scope does not accurately reflect the budget.
• The budget manager is not the decision maker.
• Deficient cost structuring undermines the architect/engineer from identifying project elements.
• The budget is based on unreliable benchmarks.
• The contingency plan fails to accommodate project miscues, time allotments and economic fluctuations.

BACKGROUND

With data like this, independent eyes are critical to meet stakeholders’ expectations. That is why Construction Check™ world-renowned clients rely on them to responsibly determine project/program capital construction costs before they commit resources.

Sources: McKinsey Global Institute, KPMG, Independent Project Analysis

SOLUTION

Immediately upon deciding to build, hire qualified independent cost estimators, like Construction Check™, as a standard practice. Here’s how their experienced, front-end advice on initial budgets – before work begins – best serves everyone:

RECOMMENDATION

Get the real bottom line. Construction Check™ helps clients to Improve Cost Certainty™, minimizing risk and increasing success on construction projects nationwide.

About the author

Lee Thomas, MBA is the chairman and CEO of Construction Check™. Lee has over 20 years of hands-on operational process experience under his belt. He is deeply committed to seeing your construction project succeed.

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