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Why and How We Get Pricing Early
If you’ve started a design project in the last few years, you’ve likely experienced an unfortunate shock when the pricing estimate rolls in. We hate that feeling, just as much as you. Instead of leaving it to chance, we take a different approach to helping our clients navigate the confusing and variable world of construction costs.
January 14, 2021
Building something is expensive. And, unfortunately, the hope that costs will go down any time soon doesn't seem to be panning out. Whether it’s the costs of labor and materials, or the increased cost of delays and permitting, there’s been a slow and steady rise in building and construction cost.
As design professionals, we have no control over the costs of construction.
We don’t like it, but it’s true. We can’t control the market. Instead, we try our best to help steer our clients toward budget-appropriate designs while using our past experiences to understand what costs might be.
A lot of design firms ignore pricing until it’s too late.
The typical process for getting a project priced might look like this. (This is true across all project types and sectors.)
- A designer uses an estimator or their knowledge of relatively stable construction costs to provide a rough estimate to the client based on the client’s desired scope of work.
- Designer and client work through the design and then the designer produces final construction documents.
- Construction documents are provided to multiple contractors for them to price out a bid based on the scope described in the documents.
- The prices from the contractors come in and, hopefully, one or two are in the ballpark of the original goal.
- If the bids are high, the designer and client enter the costly and lengthy process of revising the scope and modifying the drawings to meet the budget.
We like to take a different approach and start pricing early.
The process just described rarely works, especially in the current building and construction environment. At Board & Vellum, we approach pricing with a different process. It takes little time but allows us to slowly and accurately steer the design ship through the seas of pricing, rather than plunge straight into a storm.
We Get a Sense of Cost Before Designing
Before we even start designing, we take stock of the project goals and site conditions in order to provide some ballpark estimates. This phase is aptly called Pre-Design. Usually, we go through a color-coded diagram broken down by room or area with a range of costs per square foot for that area. Broad cost-per-square-foot exercises help us understand big picture elements and whether we want to take anything off of the table before we even start design.
As a client, you may have given us a long wish list and a budget that doesn’t match (because, really, how would you know?). Some of the pricier luxury items (like that giant infinity-edge pool you wanted) may be struck from the wish list when those approximate costs come in. Or they might help you understand where you can pare down elsewhere to make sure the infinity-edge pool can happen.
This process ensures we start the design process carefully with all our cards on the table. It also means we’re on the same page as our clients about what is important to them in the design. We can include everything in detail or just an idea about something like a pool could go without spending the time and fee designing it.
We Learn from Experience
We’re data nerds and track as much project information as we possibly can. Over the years, we’ve built a custom database that captures a wealth of information about our projects. Things like construction costs, permit review times, schedules, and well over a hundred other data points. We use the historical data to understand where costs are trending and can compare current costs across similar projects, so early estimates are informed by real data.
Of course, our estimates are just that: estimates. Final pricing comes from a contractor and we can’t know where their numbers will land. But using past projects is an excellent place to start and we’ve found our data helps us get close to final numbers, though there are always exceptions.
We Help You Choose the Right Team
After we’ve completed Pre-Design, we move into Schematic Design where one of the things we do is work with you to identify good-fit contractors. Making sure you have the right team from the beginning is so important to the success of a project.
We are strong advocates for interviewing several contractors and then selecting a partner that feels like the right match for you, your team, and your project. If you want to pursue multiple bids or early estimates, we’ll work with you on understanding the risks and rewards associated with that process. Once selected, we work with your contractor to get a detailed preliminary construction cost estimate that we then use to confirm the scope of work.
We Know Details Matter
Once we wrap up the Schematic Design phase, we produce a detailed Schematic Pricing set. This pricing set helps your selected contractor provide you with a better, more accurate assessment of your project’s costs before the design is fully developed. That might sound backward, but it’s one of the ways we’re able to adjust the design to meet your needs and budget without starting from scratch.
Our sets are far more thorough than what we see from other firms and there are a few reasons for this.
- We want numbers that are as accurate as possible, as early as possible so our team has time and fee to course correct for any necessary revisions to the scope.
- We produce drawings in a program called Revit (we model them in 3D in there!) where we have access to door and window schedules and coordinated plans and elevations much earlier in the design process than we would if we were drafting in 2D.
- To ensure the numbers we get early on are informed by a thorough understanding of the project scope, we provide a preliminary outline specification document – a written document that outlines everything we can’t draw, like locations of tile, how the tile should be installed, and the assumed costs per square foot.
- Primarily, we want to fully integrate the contractor into the team at this stage in the process. Contractors have access to real-time construction costs, not us. When we’re all working together, we can build trusting relationships between the client, design team, and the contractor right from the start.
In the end, understanding the risks associated with costs will help you navigate the process with as much information as possible. With enough planning and foresight, navigating the perils of construction costs can be smooth sailing rather than a battle through choppy seas.