What is the real value or true worth of a building project? A great many factors determine the "real value" or "worth".  Obviously, the first determination is financial profit and the dollars and cents value, however, there are other criteria to consider in calculating value.

It is essential to utilize sound ethical business practices while keeping them sustainable in terms of quality.   Although compromise may be the cornerstone of many negotiations, jeopardizing one's personal or corporate mission statement, ethics or reputation should not be considered.  The bottom line is not only the dollars paid or earned for a job.  It is ultimately also the pride of successfully completing a project to your client's satisfaction and the knowledge that you, along with your vendors and subcontractors, benefited mutually from participating and contributing to that end.

Experiencing the various sides of the spectrum as an Owner Developer, Owner's Representative, Construction Manager and competitive bid General Contractor, I have come to understand the inherent philosophical similarities when wearing those various hats. 

When we set out to build a project, whether for our own property inventory or as a CM or a competitive bid GC contract, the desired framework is to work with prequalified subcontractors and vendors with whom we have a track record or who have been vetted through impeccable references.  Stocking your project with good strong subcontractors is key to a successful project, and strong in this context does not necessarily mean big.  There are many reputable small contractors that are quite frankly less stressful to deal with than the big boys.  You generally deal directly with the principal rather than having to wade through several levels of management to resolve a problem or even to get a simple decision on a minor issue.  I don't want to sound too hard on the big subcontractors; there are a lot of well-organized and efficiently run large companies out there.  Some of the benefits in dealing with a larger subcontractor is that they generally have a support staff who understands the submittal and paperwork side of the business.  For instance, this is extremely helpful when building a Leed certification project with its myriad documentation requirements.  In addition, these larger firms can easily carry the financial side of the work including retention.  Of course, the financial burden can be easily worked out with the smaller subcontractor in various ways, such as special payment arrangements that may include accelerated payments, reduced or no retention, and possibly direct payments to their suppliers.

Week Six Steel Erection

To put it simply, if you want the best path to a successful project with respect to both cost control and the shortest possible timeline, surround yourself with good subcontractors and suppliers.  This is the route we consistently take when developing and building our own projects.

For example, our most recent development project, Westconn Aviation, was completed in November 2013 at a site bordering Danbury Municipal Airport in Danbury, Connecticut.  Westconn was a two phase project totaling 30,000 sf of hangar and support space.  Both phases were completed in record time.  Phase II consisted of the demolition of an existing 11,000 sf masonry structure and the ground-up construction of the main hangar and restaurant.  All this was completed in only 14 weeks.  Integral to the success of this project were hand-picked subcontractors, and price was not the driving force.  In fact, several of the contracts were awarded to firms who were not the low bidders.   We had too much riding on meeting the completion date.  The hangar, slotted to house 16 aircraft, was fully leased upon completion.  Compounding the financial impact of not filling the space on time was that nine aircraft were displaced by the construction, and we were paying rent for swing space to house them.  This was certainly a huge incentive that made not awarding to the low bidder the best cost option.

The best approach to manning the Westconn project was obvious, but the financial value of completing a project in the shortest and most efficient time frame is not always as identifiable.  Generally, if you save time you save money, and there is a direct link to time and the quality of the subcontractors on a project.

Our business model is to understand the true project costs going in.  How we insure that is to have a purchasing policy that asserts these key principles:

• Deliver your best and final quote up front; if you are low and level you win.
• Offer no unsupported discounts, consider only valid cost reduction options where the contractor and project costs are reduced.
• Commit to prompt payment terms.

We also want to maintain the integrity of our work.   We make every effort to ensure that a job is done properly and that our subcontractors respect us and value our expertise.  This is where sustainability becomes possible - developing relationships that are respected and nurtured and that can be depended upon over the years.

Week Fourteen (14) Completion

Every project is treated as a team or joint effort.  There are no egos, there are no adversaries, there is only the achievement of a mutually beneficial goal.  This is how one's reputation and relationships are sustained.