Commercial construction projects can fall into money wasting pitfalls which can cause them to become inefficient leading to delays and over-spending. Following some key best practices can help commercial construction managers avoid these pitfalls and maximize potential for growth and development.
Here are five money and time wasters that should be avoided in commercial construction projects at all costs:
Failure to utilize a design / build process
Problem: Lacking an appropriate design / build process can adversely impact project planning, materials acquisition, continuity and stakeholder involvement.
Solution: Implementation of a Design / Build process allows a company to work on a commercial construction project from the initial concept to project completion. Compared to the traditional design-bid-build method, the Design / Build method offers simplicity and other benefits. Design / Build offers a single contract and single point of contact which in turn reduces project delivery time, changes and claims and offers continuity between designers and contractors.
Failure to consult early on and appraise sites
Problem: Failure to consult the builder or getting an appraisal on the adequacy of your chosen construction site can lead to high risk situations
Solution: A contractor’s team should be allowed to assess the site and conduct property surveys before beginning a commercial construction project which will help to minimize unforeseen project costs. Getting an assessment not only helps financially prior to purchasing land, it also allows to find workarounds if the property is already under ownership.
Failing to consider finer details ahead of time
Problem: Changing particulars such as lighting, finishes and layout after the project is under way can be highly expensive from a money and time perspective. On the off chance that there are various changes, the project can fall behind schedule very quickly.
Solution: Decisions should be made early on in the construction process so that necessary materials can be purchased before quotes expire. This way project schedule can be set based on the lead times to obtain particular materials.
Unquestionably Accepting the lowest bids
Problem: A lower bid can also translate into cost overruns, poor management, inferior quality and shortcuts. This can lead to switching the company to another more competent one or settling at a much higher price than initially anticipated. There might be exceptions to this, but it is still important to learn about the past performance of the company that will be handling the project.
Solution: During open bidding for a commercial construction project, if one bid appears to be exceedingly lower than others, it is important to conduct due diligence on the bidding company before finalizing the contract. A few actions that can be undertaken include asking for an itemized bid, a list of exclusions and a breakdown of all specific materials and equipment that are being utilized as well as their cost.
Not having financing in place
Problem: If there is no pre-existing financing to pay for the project, then that may be detrimental to both the parties involved in the construction project, especially if any expected financing does not work out.
Solution: Inadequate financing can lead to significant project delays or even litigation from the commercial construction company if payments are not being delivered on time. It is also important for there to be a financial contingency plan in place in case unknowns or owner driven changes are encountered. Therefore, all stakeholders should have back-up financing in place before embarking on the project.
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