There are many causes for construction cost and/or schedule growth. Most – not all – can be anticipated and controlled (or eliminated) where Client, Consultants and Contractors work together to manage them. Limiting changes during construction generally results in greater value for all participants.
PSMJ’s global experience in managing construction provides an accurate perspective on the complex challenges and effective methods for minimising cost/schedule growth once construction starts. Clue: It starts before design starts.
Plain truth: If you want to control construction cost and schedule growth, you have to take control of it; there is no other way. The question is: How to do that? If you are a designer, control is indirect, but indirect control can still be highly effective if you know how. If you are a contractor or subcontractor, control is direct, but still requires that you know how to do it.
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How do Designers control construction cost and schedule?
Over the last half-century, designers have lost control over the construction process, for many reasons. Partly it was not learning how to do it, partly it was not wanting to be involved in the messy realities of building, but mainly it was because of the myth that staying out of building was a good risk strategy. That idea was promoted by both professional societies and insurance companies.
It was a myth: Losing control over construction cost and schedule turns out to be a bigger risk than doing it. You’ll be blamed for cost growth whether it was your fault or not.
Taking indirect control over construction cost & schedule growth is certainly possible. PSMJ’s senior consultants have mastered the art, have done it successfully on many projects, and can show you how.
It is important to remember that some contractors will share your goal of trying to complete projects on time and on budget.
There are other contractors who plan a different game: they “buy” jobs by a tactic called “low-balling”, and then seek every opportunity to delay the project, and then claim extra costs because of the delay. They will do everything they can to sabotage your efforts to control cost and schedule, and find lots of reasons to blame you for the delay.
You will need completely different and more aggressive strategies to control cost and time in this situation – but it is still possible if you know how. PSMJ can show you how.
There is a third category of contractors: Those whose interests are aligned with the clients and designers – who may be excellent builders, but lack the management skills to plan, organise and control project progress. Your best strategy is to help them.
Your costs to maintain effective indirect control will obviously vary based on which kind of contractor you are working with. If you want to recover those costs, you need to find out which kind you’ve got before the construction contract is executed, and negotiate appropriate compensation with the client. Improve your negotiation skills with PSMJ.
How do Contractors control construction cost & schedule?
If you are a contractor, you need to be clear on your strategy for making money.
If your goals are aligned with the client and the designers, meaning that you place high priority on finishing the project on time, on budget, then your best strategy is to work closely with the designers, and appropriately share responsibility for effective management during construction. The smoother that goes, the more time and money you will save, and the easier it will be to get legitimate scope variations approved. Your reputation will be enhanced.
If your goals are NOT aligned with the client and designers, and your approach is to make more money by delaying the project and claiming costs for delay, you will be in constant conflict with both the designers and the client. If you’re smart enough to bamboozle them with these tactics, you might make more money. If the designers understand your tactics, and deploy counter tactics to frustrate these efforts, your opportunities to make money are minimised or eliminated. Your reputation will suffer.
If your cost & schedule goals are aligned with those of the client and designers, but your project managers don’t have well-developed leadership skills, we can help get them “up to speed” so your projects really do finish on time, on budget. You’ll make more money, and your reputation will grow.