CREJ

50 / BUILDING DIALOGUE / December 2018 ELEMENTS Contruction Cost Considering the Realities of Today’s Construction Market I t’s an age-old dilem- ma for owners trying to select a construction manager/general contractor: Contractor A promises great quality and service, but Con- tractor B promises to build the project for less money? What is the catch? Will Con- tractor A provide important value-added services that justi- fy the higher price? What about Contractor B? Will the end prod- uct be just what you wanted or will there be long-term defects in construction, schedule delays, cost over runs, or safety issues? Either or both could be true. But a savvy owner knows what to look for. Should I Gamble on a Bargain? Is there a catch with the CM/ GC offering lower fees and range estimates exactly in line with your current budget? It’s easy to imagine the scenario: the bargain CM/GC has clever, cost-saving approaches to phasing, sequenc- ing and schedule; brilliant subcontractors providing insightful price recommendations; and a tenured, pro- fessional staff that has excelled in working together on similar projects. Sounds reasonable, right? Of course not. Since this is not a perfect world, we can expect that the bargain CM/GC has had to compromise on one or more of these factors to live up to their promises. But what are the compromises, and how will they affect your bottom line and the final product? Subcontractors come in all shapes and sizes. Well-es- tablished, highly performing subcontractors are always in demand. Their schedules fill up quickly, and they prefer to work with high-quality CM/GCs. If you want them on your team, you’ll have to enlist their services early to get their most competitive prices. “Bargain” subcontractors, on the other hand, can be bargains for a variety of reasons. Maybe they’re new, but well-run and trying to make a name for them- selves. On the other side of the coin, subs who are inefficient, financially troubled or too small for the job can hurt your schedule, reduce quality and increase costs – a good price but a high cost to your project. How can you know which type of subcontractor you’re getting? The best CM/GCs prequalify subcontrac- tors. When choosing your CM/GC, look closely at their prequalification standards and processes. Do they an- alyze a subcontractor’s financials? Regarding Subguard: subcontractor bonding sounds good, but bonding doesn’t make a sub perform better. Bonding offers little consolation when a subcontractor fails. • Labor shortages. Good planning is your best defense against manpower issues. Bring in your CM/GC as soon as possible to prepare for subcontrac- tor and manpower requirements. The better the subcontractor group Brandon Gentrup Development Manager, Pinkard Construction On the $83 million Frasier Retirement Community in Boulder, Pinkard began detailed preconstruction and pricing studies very early in design. By bringing Pinkard in early on the Morgan Library, CSUmitigated some of the complications of the compressed design schedule.