Most Common Construction Budget Mistakes, and How You Can Avoid Them.

Here’s the thing, we all know that the most important aspect of construction ends up being the bottom line. That’s why budgets and timelines are managed so closely. So, what are the most common budget mistakes and how can you avoid them? Let’s tackle this question and get your construction project on budget!

Designing without a Construction Manager

You have the land, the finances, and the design team, and you want your designs done before you get the construction team on board. Makes sense, or does it?

Here’s the thing, when it comes to construction there is a reason why there are so many specialties involved, everyone is an expert in their field and has valuable insight to offer. So why wait until the design is done before the construction management team is brought on board? 

What value can a construction management team give in the design phase? Well, have you ever seen a pathway that is beautifully designed, but no one uses it? Instead, you see a worn-out path that pedestrians decided to use instead because it made more sense. This example illustrates the difference between design and real-world experience. That’s the synergy that can work between the design team and the construction management team.

Designers bring a theoretical design to the table, while the construction management team is there to offer advice on if the design is pragmatic, feasible, and possible within the allocated time and budget. 

We can’t tell you how many times we’ve had clients come to us with a design and budget and the project is at risk of folding because the actual tender process shows that the planned design is not feasible. If our construction management team was originally involved in the design phase, this could have been avoided. We have the expertise to know when there is another solution due to soil conditions, or if there are design elements that are beautiful but are outside the project’s budget. 

Luckily, we’ve saved many projects from folding at the tender process by taking a step back, working with the design team, and coming up with a more reasonable design that ticks all of the boxes. 

So, get a construction management team involved early in the process, even if they are just contracted for that aspect, you will thank yourself for their help and input during the preconstruction process.

Hidden Costs

It’s time to look for a construction management company. You either go through an RFP process or request pricing directly from invited companies. 

This process seems simple enough, you have schedules, management fees, etc. that you’ve requested and should be receiving the same documentation from all proponents. But even with this process, are you sure that you’re able to compare apples to apples?

Over the years, we have noticed a lot of construction management companies will show a very low fee in their original proposal to get in the door. They do this by deferring some of the expenses in separate contracts, for example, the roofing contract. There are several problems with this, the obvious one of you not getting accurate price comparisons, but you may also encounter change-orders, and you could be nickel and dimed later on in the process.   How can you avoid this? And how do you know if you’re getting apple to apples? Ask for the company’s history, and references. At Scuka, we believe in transparency, that’s why you can find statistics on our past budgets and timelines published right on our website. On average we are within 3% of the overall budget and within 1 month of the proposed delivery date. These statistics matter, they matter to us, and they should matter to you. So ask for them!

Geological Testing

Geological testing is very important when it comes to making sure your project is designed according to the soil conditions, it’s also pivotal in providing accurate quotes for the earthworks. How a building should be designed for sandy conditions is much different to clay, they also take different considerations when completing earthworks too. 

We’ve seen geological studies where the test holes were a hundred feet away from each other and different mediums were found in each of them. This data was used to inform the design of the project and the basis for a quote for our services. In this instance, we could quote on the project, but with the caveat that more test holes will be required to give an accurate quote. 

This method of geological testing is less expensive, but it leaves a lot of unknowns for you, your design team, and the construction manager.  When ether more test holes are obtained or site excavation reveals soil conditions, the new information may mean a change in design and the quote for earthworks. All of this could delay your construction time and cost you more in the end. 

To avoid cost creep and time delays, make sure you have an accurate understanding of your soil by having the appropriate investigation completed during your geological testing.

Winter Construction

We live in the great white north, where winters are cold and the ground freezes, even if we are in the Okanagan. Construction can continue throughout the winter, but concrete temperature is sensitive. For concrete to cure properly and have an approved compressive strength measurement, a certain temperature must be maintained.

Temperature requirements vary depending on what structure is being poured and what concrete mix is used, but on average heating and hoarding will be required when the temperature starts to hover around 5*C.  

What does this mean for you? If your schedule leads to pouring the foundation during cooler temperatures, costs can easily rise by the tens of thousands. Ideally, your construction manager will put together a construction schedule that avoids this scenario, but it can’t always be helped. 

Ultimately, if it looks like your project will need heating and hoarding, you can ask your construction manager for comparatives between pouring during the winter, or waiting until the thaw. Having different timelines and pricing in hand, you can do a cost-benefit analysis and decide what direction is right for your project.

When planning a project, it’s always best to have a working schedule so that you can budget accordingly for a winter start and not have a surprise expense later down the road. 

No matter what project you are launching, make sure to plan ahead, lean on your experts and ask intelligent questions. The four areas discussed in this post cover the most common areas we see budgets get out of control, with the exception of upgrading selections, but that’s another topic for another day.