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How To Evaluate Construction Options
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Business New Haven
11/12/2001
By: Anne-Marie Brungard
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Okay: You have made the decision to expand your business and determined that a new building is your best option. There are two business basics that apply here, too: Planning saves costly mistakes, and your product is only as good as your people.
The Building Vision
Function - What is your clear vision for the use of the space? Consider interrelationships between staff, office locations, equipment, machinery and display materials. Are any special requirements needed for machinery clearance, retail displays or manufacturing space? Analyze your company's sales record and trends to forecast future needs. You may have to plan for more employees, allocate more storage space or reconfigure layouts.
Aesthetics - What will the exterior of the building look like? The materials you choose will have a direct relationship with the impression your building makes to customers and the public in general. Distinctive facades of wood, brick, stone, glass, metal and other materials can help to deliver that aesthetic appeal.
Planning - What do you really want? You will have to present a clear plan to your designer and/or builder outlining your assessment of current functionality, forecast of future space needs and aesthetic requirements. Describe the image you want to deliver to your customers and clients. Your designer and builder will take all of these issues into considerations to build a structure that meets your needs.
The Building Team
As building owner you will have to make some decisions based on your level of expertise with building projects and willingness to commit an extended period of time to project management duties. Addressing these concerns early will help you to choose a building team method. If you decide to hire a project manager or construction manager, don't forget to adjust the bottom line.
The design/bid method - The owner solicits proposals and pricing bids from design professionals (engineers and architects), and chooses one design professional to develop the design plan. The owner requests competitive bids from contractors based on the design plans and then selects the appropriate contractor.
One advantage is that the owner independently selects the design professional and contractor and is involved in every detail of the process.
Disadvantages are that the process is extremely time-consuming and requires the owner to have in-depth knowledge of the building process he or she may lack. The owner will be involved with day-to-day issues including disputes between the contractor and design professionals. Two separate contracts must be negotiated for the design professional and contractor. Because the contractor is involved in the process after completion of the design plans, he cannot give early input into cost-saving materials that may be employed.
There is often a tendency during this method to simply hire the contractor with the lowest bid, but consider reputation and experience, too. Interview potential candidates and check references. Price should not be your only consideration, because this is sometimes the most costly option.
The project team method - Similar to the design/bid method except the bid process is eliminated. The owner selects the contractor and design professional at the same time.
Advantages are that the team is assembled at the onset of the project and each can contribute their expertise during the initial design phase. Omitting the bid phase fosters a collaborative rather than competitive relationship between the design professional and contractor.
Disadvantages are that the owner must negotiate two separate contracts with the design professional and contractor, and that the owner is very involved in the day-to-day operations of the projects and must have extensive building experience.
The design/build method - The owner selects one company, the design/builder, to handle the entire project. This process of one-stop-shopping alleviates the owner's burden of managing several different entities. The design/builder retains the design professional. The owner is not entangled in the details and can function more efficiently as project manager.
Advantages include the negotiation of only one contract, allowing for cost-effective pricing; a united team is on board from the beginning of the project reducing conflict and focusing on achieving the owner's vision.
Disadvantages are that an owner may require competitive bidding to select the design/builder, each competitor should receive a stipend due to the amount of time and creative effort required in this process. This method is considered by some to be the most convenient and efficient.
The Building Construction
Whichever method you choose, your chosen designer and builder will work closely with you to complete the project. Additional considerations include:
Systems vs. conventional construction methods - Systems construction uses building materials that are pre-engineered to fit together precisely. Conventional construction methods require that most building components, like wood, steel, masonry and concrete, be cut, fitted, welded and constructed on site.
Framing, roofing and walls - Will be outlined by your designer and builder according to your building requirements and functionality.
Site - Consider transportation access, parking, soil conditions, surface drainage, utilities and expansion possibilities. Is the community or neighborhood appropriate for the type of building you are planning to build? Are the landscaping and exterior aesthetics complementary to neighboring structures or other businesses that might move nearby?
Financing your project - Your designer and builder will assist you with developing a project budget. Look for low interest rates and liberal terms for financing. During the actual construction phase you may seek interim financing; after the construction is complete you may take out a long-term mortgage. You can estimate that mortgage rates will account for 90 percent of the project's cost.
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