Working with Contractors to Build a Better Budget
A budget for an improvement project typically includes the cost of fabrication and installation plus the cost of facility downtime. As projects move through concept and design, budgets are continually refined so that procurement can be provided with a reasonable estimate of the entire cost of the project. By involving a knowledgeable contractor early during concept and design, owners and engineering firms can have the benefit of additional input for assessing facility downtime and project installation costs. A contractor can also serve as the voice for local market conditions when it comes to estimating labor and material costs.
Constructability Reviews
During concept design, owners and engineering teams can work with a contractor to identify fabrication and installation challenges. The contractor may be able to provide alternative solutions before design begins that would help minimize downtime and installation costs. The timing of a constructability review is important: early enough so that the contractor’s recommendations can be considered during design, yet when there is sufficient detail to evaluate the fabrication and installation variables, including specifications and material costs.
Execution Plans
A contractor can estimate approximately how long fabrication and assembly will take and whether there is sufficient time to perform the final installation during the dates of a proposed outage. With an understanding of the overall design and construction process, contractors can provide a preliminary schedule and may recommend additional scheduling strategies to improve project efficiency and cost, including equipment assembly (offsite or onsite), QA/QC inspections, shipping, site staging, and task sequencing. Using the project schedule, contractors can also estimate labor costs.
Safety and Quality Plans
Because safety and quality are essential to project success, it is worthwhile to consider both during the concept and design phases. A contractor can help owners and design teams identify special safety precautions, procedures, and/or training requirements that would impact project schedule and cost. Contractors would be able to consider where craft labor will be located, the tasks being performed, and the safety risks involved. If necessary, any design changes can then be made that would further protect craft labor and plant personnel from injury, particularly if a portion of the work is to be completed while a facility is operational.
In terms of quality, contractors can assess the cost and timing of key QA/QC tasks that will be necessary to meet design specifications and requirements. Activities that would impact cost and schedule might include weld procedures, specialized training, document control, inspections, testing, and customer hold points.
Final Thoughts
Budgeting efforts that include the input of a contactor during design also benefit the eventual RFP process. Contractors invited to bid on a project will have a clear and consistent understanding of the scope and requirements, while owner and engineering teams can evaluate bid proposals against the estimated budget.