Owners often ask us why why they should use a freelance construction estimator or general contractor to provide pre-construction services early on in the design process. The simple answer is that you cannot afford to not use one, otherwise the owner might be facing significant hurdles as the project moves forward in regards to cost and constructibility issues. In some cases, the project may even die!
The best way to illustrate this is by taking a look at a recent project that Outsourcedestimating.com worked on. We were hired by a new general contractor in the United States to help put together a bid on a very high end restaurant that they were pricing. The project was in a large metropolitan area and included a new 7,000 square foot building. In addition, it included extensive site development, as well as deep foundations due to poor soils. Being a new general contractor, using a freelance construction estimating firm, such as Outsourcedestimating.com, made sense because they did not have a estimating department up and running and we were able to give them a fixed price to secure sub pricing, do all of the takeoffs and manage the entire bid process for them!
The first question that we asked the general contractor is what was the owner's budget for the project, as we were expecting the combined building and site construction costs to run between $325 - $350 per square foot based on our previous experience on these type of restaurants. The general contractor inquired, but was unable to get a straight answer on the budget, but we proceeded to put together the estimate anyway. Over the next three weeks, Outsourcedestimating.com worked the sub contractor community hard to get bids, answered questions, sent RFIs, as well as prepared internal takeoffs and in house pricing. As bid day approached we stayed busy constantly updating the bid analysis as the subcontractor and supplier bids came in, as well as putting together a preliminary schedule and generating clarifications and exclusions to our bid. We were very confident that we had put together a very tight number.
A few days after the bid was submitted, our client was informed by the architect that they were determined to be the lowest bidder as a result of the architect's bid analysis and the bids were going to be presented to the owner. A few days later, the architect called up the general contractor to tell him that the project was 30% over the owner's budget. The owner's budget also included owner supplied items, such as kitchen equipment and other owner supplied FF&E!
Due to the significant budget issues, the owner elected to put the project on hold, even though they already owned the land. Despite the fact that the owner was operating other restaurants in the city, they had to devote time to work with the architect to redesign the restaurant without negatively impacting the concept of the restaurant, while trying to raise additional funds to build the restaurant. To date the project is still on hold.
These issues that resulted on the project being placed on hold, could have been avoided if the owner had brought on a freelance construction estimator to provide pre-construction services early on in the design process. The budget issues would have been identified and addressed during the conceptual estimating phase, with changes made prior to permit plans being developed. At the end of the day, the lack of compressive pre-construction services cost the owner months of delays, tens of thousands of dollars in lost revenue, the expense of developing new plans and countless hours of the owner's time to go thru the entire design process again. The owner of this project learned the hard way that there is a great deal of value in using a freelance construction estimator to provide pre-construction services early on in the process.
Outsourcedestimating.com is the leading provider of freelance pre-construction, estimating and construction management services for to clients world wide. Please contact us for more information at info@outsourcedestimating.com.