On projects where we serve as a construction manager or team with a construction manager, we are able to break down the project into its incremental parts in order to exert greater control over costs and schedule for the owner’s benefit.
This approach takes advantage of Building Information Modeling (BIM) software that associates a database, which can include material quantities, productivity rates, and costs, to each component of a facility. Because of the administrative burden of this approach, it is most appropriate for very large projects, such as a large organization’s multi-project building program or an insurance company’s adjustment following a large scale natural disaster such as a flood or hurricane.
- BIM: For a building or facility, the process starts with development of a BIM model of the project, with a database incorporating fields such as material quantities, productivity, and labor requirements. For natural disasters, a database model predicting damage based on aerial mapping that produces the same data filed by building type, is used as a data source.
- Project Aggregating: Using the BIM database, the project requirements are broken into tables of materials, labor, and equipment required for each trade. These tables become the primary tool for bidding the project. As they come directly from the BIM database, they reflect quantities with extreme accuracy, needing only that waste be allowed for.
- Bidding: Labor, materials, and equipment are bid separately for each trade. For example, drywall may be bid directly to the manufacturers, and purchased directly by the owner. This avoids the multiple markups on materials that results when a manufacturer sells to a material supplier, who adds a markup and sells to a subcontractor, who marks up this cost to the general contractor, who in turn marks up the cost to the owner. Along the line, it is likely that some parties in the chain of markups will add a contingency to cover the unknowns. In the standard bidding process, the owner pays, not only for these multiple markups, but also for the accumulated uncertainties of the construction process. In a sense, the owner pays for every contingency that could happen on a project, even though only some of the contingencies actually occur. The unused contingencies become extra profit for those in the supply chain. There is nothing wrong with this, the owner is transferring the risk of contingencies to the contractor, and is paying for that. To optimize costs, it is to the owner’s interest to take the uncertainty out of the pricing, so that only the contingencies that do occur are paid for. This is accomplished by having the contractors base their bids on the quantities derived from the BIM database. Labor is more complicated, but can be handled in much the same way, particularly for project-specific labor that comes from union halls. However, labor bidding must allow for self-performance by contractors, and for specialty skills required by a project.
- Construction Management: Management of the project during construction requires the coordination of multiple prime contracts, as well as material supplies, but is similar to any other project involving multiple prime contractors.
The primary advantage to this approach is a substantial reduction in cost. However, aggregating the project with a BIM database can also permit greater accuracy in scheduling and control over cash flow.