Types of construction projects
The three most commonly used processes for construction projects are:
Owner/Builder Projects:
Owner/builder projects require an immense amount of time to plan and manage. A background in construction is a prerequisite. In addition, the burden of responsibility is solely on the owner.
S/he becomes personally involved in choosing the right designer or subcontractor to use, identifying and resolving possible gaps or overlaps in bids, deals with various regulatory bodies and navigates the complex permit process and a host of other questions even before construction can begin.
In reality, the most an owner could save in terms of real dollars is the cost of his supervision. Are you really saving money when you are taking time away from your growing business? Making money at what you do best is always easier than taking on a new endeavor.
Bid Projects:
Business owners turn over control to an architect or engineer to design and manage their project for a fee. The project is then placed out for bid. Usually the lowest bidder is chosen as the general contractor.
The lowest bidder mentality creates an environment where price dominates the general contractor’s decision making. With multiple contractors bidding the same project, the winning general contractor is normally forced to take the lowest bids in order to secure the contract and maintain his profit margins.
Lack of familiarity with these subcontractors can lead to a multitude of problems. In some cases, it may mean that a less qualified contractor is chosen. In other situations, they may be qualified but lack financial stability. Mechanics liens against property owners for unpaid bills are common in this scenario (Even when the owner has paid in full).
The lower upfront cost is always appealing but the project is not over until construction is complete. Change orders and back charges are common in projects where unknown contractor/subcontractors are used. These unforeseen costs could actually make the project be more expensive in the end.
Design-Build Projects:
The designer, building manufacturer, general contractor and warranty, all come from the same place – “A single source of responsibility.” Business owners work with a design-build firm to negotiate construction projects.
Typically, historical costs are used to establish a baseline budget for project cost. Projects are then designed in-house. Subcontractor expertise and feedback are welcomed as they may help to further reduce cost or improve design.
Exchanging design information in-house virtually eliminates the use of RFI (Request for Information) and delays waiting for designer approval.
Once design is complete, specific tasks are placed out for bid to at least two different known subcontractors. If project costs are still too high, the owners and the design-build company work together to find cost saving solutions and re-bid the project.
Once an agreement is reached, the project is ready to begin. Scheduling tends to be easier because of our centralized control over all areas of the process.
At RBS, we work with a select group of subcontractors so that we know what to expect from them and they know what to expect of us. Jobs tend to run more smoothly and require less owner involvement once actual construction begins.
Let’s get started – call 979.596.1451 or just fill out the Quick RFQ form on the right hand side of this page.
