Reducing Project Costs
On August 28, 2008, Tom Koulouris – co-owner of Koulouris-Freyer, Inc., (KFI), a leader in construction management services, led a webinar sponsored by E-Builder. In this webinar Mr. Koulouris detailed ways to Reduce Project Costs. REDBUD Construction Services attended this webinar. With permission from Mr. Koulouris, we have summarized some of the main points of the webinar below.
The four major components of a project are planning, design, construction, and occupancy. The owner usually has control over the planning, design, and occupancy and the costs associated with these components, but spends most of his or her time trying to control the construction costs. The construction component is defined as determining the measurable output of the design as managed by the owner. And as Mr. Koulouris stated the construction component “is pricing the work that is planned and designed.” The planning and design components are the areas where the owner should focus a majority of his or her efforts in order to ensure that the overall project costs are minimized. Read more
Liabilities for Construction Owners
This article in the Business Courier lists some areas of potential liability for owners of construction projects.
“As a construction owner, you can incur liability if you fail to recognize and comply with certain implied legal obligations, many of which spring from an implied covenant of good faith. Simply put, this covenant states that neither party will do anything to injure the right of the other to obtain the benefits of the contract. An owner can be found to violate this covenant when acting intentionally, or in bad faith, to frustrate or delay a contractor.”
Here are some examples of items that an owner can provide to avoid of liability issues:
- Providing a contractor with all soil studies and relevant information.
- Provide the contractor with accurate plans and specifications.
- Include contractual language making the contractor the guarantor of the adequacy of the plans and specs.
- Obtain a peer review of the design documents.
- Respond promptly to extension requests.
“To avoid claims and unsatisfactory results, it is important to pay attention to implied obligations on construction projects. With careful planning and awareness of potential issues, you can help ensure a successful project for everyone involved.”
Read the full article here.
2007 Annual Survey of Owners Available On-line
The annual joint venture between CMAA and FMI conducts a survey of owners of capital and private projects, and the 2007 Annual Survey of Owners (the Eighth Annual Survey) is now available on-line through the CMAA website.
TheFMI/CMAA Owners Survey, which has become an industry defining and forecasting instrument, “is focused on how owners are accelerating the transformation of the construction process through the use of technologies to enable program management, collaboration, and effective communication strategies.” (page 6)
The report highlights 7 distinct drivers of the construction industry:
- Aging Infrastructure
- Aging Workforce industry-wide
- Struggle to Attrach Generation Y, and retain Generation X’ers and baby boomers
- Accelerated Schedules, globalization, and increased complexity in construction
- the Ability to Learn Alternate Delivery and Financing Systems
- Pressure to Meet Global Competition
- Investment in Purposeful Training
As in every Annual Owners Survey, the 2007 edition delivers a litany of information for the construction industry. Other highlights from the survey are asummaries of CM processes, enabling technologies, and the Use and Practice of Building Information Modeling (BIM). And a quote that sums up the survey best…
From W, Edwards Deming, “It is not necessary to change. Survival is not mandatory.”
Return to our blog to read more acrticles on these and other subjects related to the Construction Management Profession and the construction industry in general.
Construction Management Fact Sheet
The ConstructionManagement Association of America provides this fact sheet to define and explain the specialized profession of Construction Managment (CM).
You can also read this post for a further explaination of the CM profession.
REDBUD Construction Services featured in Industry-Leading Blog
REDBUD Construction Services’ advice has been featured in a post this week on the Mark Up and Profit blog. Thanks to Michael Stone and his staff for teaching RCS how to serve their clients and we hope that our example can help others in the industry.
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