We are always advocates of getting a contractor signed up early in the process and to provide pre-construction services. (see post “An Argument for Negotiated Bidding”) This method allows for cost control and builds a real team. We strongly believe in the team approach: architects and contractors work together with the owners to complete a project efficiently, on schedule and on budget. It is without adversarial issues that come up, absent of the trusting relationships that the team approach affords.
When a contractor is hired for a project before it can be built— meaning, in the design development phase, and before there is a building permit ready— they will provide what are called pre-construction services and it is usually with a short contract and hourly fee. Specific services help illustrate the benefits of this approach to a project and the following defines pre-construction services.
Establishing the Team
The architect and contractor together decide who needs to be consulted for services such as structural engineering, who the mechanical sub-contractor will be, an audio-visual consultant, or a consultant for salvage and selective demolition for example. The contractor will provide valuable input on engineering because they have worked with many engineers in the field when building projects and no two are the same. Selecting certain subcontractors early sets up a design-build process for certain systems relieving the architect of some design work. This will also save money on design fees.
Determining the Budget
A valuable service of a pre-construction agreement is the contractor will provide a detailed preliminary budget. The owner will receive budget feedback on the architect’s design before going into all the detail that will eventually be included in the set of drawings. It saves the owner money to see where the budget is headed before investing too heavily in the architects’s services.
The owner, architect and contractor review this preliminary budget together and discuss options or means and methods. From this discussion and any follow up changes, the budget becomes a milestone goal for the project. There is now a clear path to aim the project down, which makes for clear expectations and keeps the process moving efficiently.
Value engineering services are when, as a result of the budget goal, the architect revises and develops the design to reflect the budget goal. The design is then tested again and the contractor will provide revised pricing.
In the case of a remodel, there are many unknowns covered up in the existing house. To prevent these costly surprises later on when the project is under construction, the contractor will do discreet exploratory investigations of the existing house. Most commonly, the areas surveyed are, foundation depth, seismic bolting at foundations, potential hazardous materials and potential routing for heating and ventilating.
Revisiting the Budget
The contractor will provide the owner with a revised budget when the design becomes more developed. This revised estimate breaks out costs by industry or trade allowing the team to see clearly which areas of the project incur greater costs and could potentially be sent to alternative subcontractors for bidding. Along with the input of the contractor and design team, the owner then evaluates the revised estimate alongside their budget goal for the project. Now the team can make revisions and do further value engineering if necessary.
After the architect prepares the permit drawings and construction documents, the contractor then
provides a final budget based on the construction drawings. This involves having multiple subcontractors visit the site. The contractor evaluates the many bids and confirms the scope of work for each sub based on the interpretation of the design. It also involves creating the initial project schedule based on feedback from the subcontractors and contractor’s superintendent.
Construction Contract Documents
Only after the process described above does the contractor prepare and sign the AIA contract with the owner. The contract includes the estimate which is now referred to as the budget, describes the scope of work, the schedule and the labor rates. The final construction drawings issued by the architect are also included in the contract and described by their date issued. The Pre-construction contract ends once this contract is signed.
Construction and remodeling are complicated and in the residential field, this is usually the single largest expense the owner will experience aside from the actual purchase of the property. We would like our clients to feel they are being guided comfortably through the process and having a team approach to the design and construction will minimize surprises earlier in the project. It is a fact that the unknowns are always more costly later in a project, no matter what.