How to avoid unnecessary expenses on construction projects

New York City has the highest construction costs in the world, according to Turner & Townsend's 2018 International Construction Market Survey. Avoiding unnecessary expenses is always in the interest of project promoters, especially in cities where construction is expensive!

Many hidden costs can be removed from the project budget by applying best practices in engineering design and project management. There is a common misconception that you must sacrifice building features to reduce costs, but in many cases, the opposite applies – cost savings and performance improvements are achieved simultaneously.

The following are some common examples of unnecessary costs, which can be eliminated with smart design decisions and effective project management:

• Oversized construction systems, especially mechanical equipment.
• Increased material and installation costs, due to poor layout of construction systems.
• Change to correct overlapping equipment locations that were not detected during the project design phase.
• Amend orders to correct construction errors found during final inspection.

Optimize the cost of your next construction project.

Avoidable Cost #1 – Large Construction Systems

Having equipment with excess operating capacity is not necessarily a good thing. There are many negative consequences of oversized construction systems:

Oversized building systems are often the result of “rules of thumb” when selecting equipment. MEP installations can only be optimally sized after a detailed analysis of the building loads such as space heating, air conditioning, ventilation and water consumption. Required capacity can often be reduced with smart design decisions:

• Heating and cooling equipment can be scaled down if the building envelope is improved. Insulation, air sealing and ideal window orientation can reduce heat gain in the summer and heat loss in the winter.
• Efficient electrical products, such as LED lighting and NEMA Premium Efficiency motors, reduce the load on key service equipment, allowing for lower capacity. Service equipment is typically the most expensive part of an electrical installation and the savings resulting from lower capacity can be significant.
• Water-efficient plumbing doesn't just reduce water bills. They also allow the use of smaller water heaters and booster pumps.

Avoidable Cost #2 – Poor Building System Layouts

Mechanical, electrical and hydraulic installations are not limited to fixed equipment, as they also depend on distribution systems to fulfill their function. HVAC systems provide their heating and cooling effect with hydronic piping and air ducts, electrical installations provide voltage and current through circuits protected by conduit, and automatic sprinkler systems rely on a network of piping.

The materials and labor used by building systems can vary drastically depending on how their layout is designed. For example, if you install a chiller too far from the main service equipment, the circuit that powers the chiller ends up being very long and expensive. The cost of building systems can often be drastically reduced by optimizing equipment positions.

If you need to install a sprinkler system to comply with Local Law 26, you can drastically reduce your cost by optimizing the layout. A fire protection design that provides full coverage with the fewest sprinklers saves capital because the total length of piping to supply all sprinklers is reduced.

Avoidable Cost #3 – Change Orders Due to Equipment Overlap

When a building is designed using only 2D drawings, equipment location conflicts are not always easy to visualize. This is not a problem in building areas with a lot of open space, but it can be difficult to represent mechanical and electrical rooms in two dimensions since many types of equipment must be installed in limited spaces.

Overlapping equipment locations can be avoided with close communication between design teams responsible for different building systems, and using a 3D modeling tool like Revit is also very helpful. Of course, the experience of design engineers also plays an important role – design errors will be avoided if you work with experts who are familiar with building codes.

Change orders are expensive because you must modify work that has already been completed, and that means they cost materials and labor hours. Modifying project documents is much faster – when a necessary change is detected early, unnecessary expenses are avoided.

Avoidable Cost #4 – Change Orders to Correct Errors After Inspection

Even when a project is designed without equipment location conflicts, errors can happen during the construction process. There are two main ways to avoid this:

• Effective project management and supervision. Engineering design firms also often offer these services.
• Provide clear instructions and specifications in design documents. If there is ambiguity in drawings and other technical documents, contractors may interpret them incorrectly.

In addition to bringing additional expenses in terms of materials and labor, construction errors also delay the completion of projects. When the project in question is a multifamily or commercial building, payment of rent is delayed because occupancy of the building is only possible after all errors detected in the final inspection have been corrected.

Conclusion

Construction is a capital-intensive business, but there is no need to make projects more expensive than necessary. If you work with qualified design engineers and implement best practices in project management, many costs can be reduced from the budget without compromising resources and construction performance. The opposite applies: Experienced engineers can often find ways to improve performance simultaneously with cost reductions.