“During the last three years, the annual rate of inflation within the construction market has skyrocketed to nearly nine percent driven by increases in material costs and shortages in skilled labor,” says Bill Gustafson, principal for Ballinger, an architecture and engineering firm in Philadelphia. “This is in sharp contrast to the 12 years prior to 2004, during which the inflation rate stayed relatively constant increasing by only two or three percent each year.”

Achieving the desired cost result is completely dependent on what strategies are used in the early stages of project development to manage costs, according to Gustafson.

“In terms of cost containment, projects literally are won or lost in the first three months,” he says. “Ideally, cost modeling tools should be adopted right away in the planning phase and constantly revisited as the project progresses.”

Space-Based Cost Modeling

“Typically the first cost modeling strategy we use is a space-based planning approach,” says Steve Wittry, associate principal and senior project manager for Ballinger. “This profiles what type of space the owner wants and establishes an early reality check on what is possible within the budget parameters.”

Space-based modeling provides an early look at the project’s estimated cost by taking the type of space and using differential costs to reflect the levels of complexity of specific components.

“Over time we’ve built up a database of costs related to space usage and whether the space is new or renovated,” says Gustafson. “For example, chemistry space is typically more costly than biology space due to more fume hoods, and mechanical and electrical system requirements.”

He points to the space-based modeling that Ballinger recently conducted for new and renovated science facilities at Furman University in Greenville, S.C., as an example of planning based on both budgetary restrictions and existing building constraints.

The first phase of the Furman project will involve construction of a new 70,000-sf addition with separate areas for chemistry and biology research. The new chemistry space is estimated to cost $225 per sf, while the biology space is predicted to be $183 per sf.

Costs per sf are expected to drop slightly in the second phase of the project, which involves renovation of an existing 130,000-sf undergraduate science building. Initial cost estimates predict that space devoted to earth and environmental sciences will cost approximately $180 per sf, chemistry space $165 per sf, biology areas $134 per sf, and space devoted to physics will cost the least at $107 per sf.

System-Based Cost Modeling

“When more details are required, we then move from space-based into systems-based cost modeling,” says Jonathan Friedan, an engineering principal at Ballinger. “As the programmatic elements become fixed we can look at the building systems individually and see how the type and quality of systems fit into the cost model.”

Friedan adds that along with estimating the first cost of each system, the owners and the engineering team should outline what the project is trying to achieve from an energy standpoint. At the same time as creating a construction cost budget, an annual energy usage/cost budget should be created as well.

“When we worked with Dartmouth College, one thing we did was to analyze the life cycle costs of several chilled water plant options,” says Friedan. “We looked at adding stand-alone steam or electric plants, versus adding to an existing campus plant.”

The Dartmouth study found that over 25 years, the present worth of energy costs were equal to or more than the capital costs for new or expanded plants.

Risk Analysis

“Another cost-management strategy that is helpful at the start of any project is a risk analysis,” says Wittry. “By identifying potential project risks and outlining what steps would be taken to remediate those risks, owners gain a much clearer understanding of where potential cost sensitivities lie.”

Even though every risk analysis is project-specific, there are some common factors such as site development which always seem to make the list.

“It is extremely rare today to find an academic science building being built on a clean, level site,” says Wittry. “Based on space limitations, university restrictions, and budgets, science facilities often tend to get whatever space is left on campuses these days.”

One example of having a less than ideal site choice is the new transgenic mouse facility that Ballinger designed for the University of Pennsylvania. The facility, which now houses 40,000 mice, needed to be built on a site located directly adjacent to an existing underground subway. Since mice are sensitive to vibrations, Ballinger’s solution was to actually put the entire mouse facility on springs in order to dampen vibrations caused by the subway.

Integrated Delivery Process

“At times, some owners attempt to beat marketplace inflation, and keep overall costs low by accelerating the start of construction,” says Gustafson. “The challenge, however, is making sure the same levels of quality can be achieved despite an accelerated schedule.”

Project acceleration can occur by condensing the order of a conventional design-bid-build method.

On the school of medicine project for Philadelphia’s Temple University, Ballinger shaved approximately $11 million off estimated project costs by accelerating the project schedule and moving Temple into their new building a year ahead of schedule.

“Instead of designing to 100 percent bid documents, it is possible to change the way we sequence and relay design documents to the trade contracts,” says Gustafson. “Today there is a much more integrated approach between design and construction, even bringing trade contractors in at the schematic design stage.”

He points to a current project with the University of Wisconsin, which will incorporate an integrated project delivery methodology requiring the use of a Building Information Modeling (BIM) database.

The BIM database, which generates 2D and 3D drawings in digital form and consolidates all building information related to schedules, costs, procurement, and operations, is accessible to all project participants.

“Using BIM is a great example of how technology is helping to integrate the project delivery process,” says Gustafson. “It is just one more way that we are breaking down traditional barriers between design and construction.”

By Amy Cammell

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