In over a decade of experience in designing fire stations, BRW Architects has found that a methodical process for planning, design and documentation greatly improves the collaborative effort and reduces the likelihood of budget overruns.
Step 1 – Visioning and Programming
A vital first step for all project stakeholders is reaching consensus on 3 to 5 prioritized goals for the project. If a priority for the fire station is an EOC, for instance, then that room’s structural integrity will be a cost consideration. Another important cost factor in an early budget strategy may be whether the building will emphasize energy efficiency and environmental standards coupled with the goal of LEED certification.
Stakeholders must be aware that project goals or priorities can shift during design, but these revised goals can conflict with fundamental early design decisions such as building siting, structural systems, or material assemblies, and have a significant impact on the budget. This is especially true with building renovation and additions, as it is always difficult to know where to stop with renovation.
To properly evaluate existing buildings, an Existing Condition Assessment should separate the project scope into three categories: 1) deferred maintenance, physical condition, and code improvements, 2) operational improvements, and 3) aesthetic improvements. The next step is to prioritize these scope categories and align them with the budget accordingly. The overall goal should be to find the best value. It only makes sense, for example, to spend money making the building watertight before renovating its interior. Another priority, however, might be exterior design, where aesthetic improvements for the benefit of the community may demand a potion of the budget regardless of other needs. The final step in defining project scope is going through a detailed Programming Process, which translates operational needs into appropriate building space and site requirements.
Step 2 – Budget Analysis
While developing the Program, a parallel task is developing a Budget Analysis that breaks down the owner’s total project cost into 1) construction cost, 2) owner’s development costs (such as materials testing, utility company costs, separate contracts like voice and data wiring, furniture and equipment), and 3) professional fees.
Two important budget items – not discussed often enough – are contingencies and cost escalation. Most owners agree that a small contingency fund built into the construction contract helps accommodate small unforeseen conditions. But another contingency fund should also be held outside the construction contract to cover larger unforeseen issues, if any, as well as to fund added scope desired during construction. It is not uncommon for stakeholders to develop greater insight into their needs as a building project progresses or if a contingency is unused at project completion, it often becomes useful to fund amenities as extra furniture. Today’s construction economy and the cost escalation of labor and materials is also one of the hardest cost factors to predict. A common approach to this factor is to anticipate cost escalation from the present through the mid-point of construction, when the contractor has completed the subcontractor buy-out.
Pre-planning is also the time to discuss the most appropriate construction contracting method. But whether a lump sum or cost plus a negotiated fee contract attained through a Competitive Sealed Proposal, Construction Manager at Risk or Design Build method, it is important to identify the responsibility for cost estimating and a process to re-align project scope as necessary. This especially true when the contractor is under contract during building design phases, when all team players should participate in the scope-to-budget alignment process.
Step 3 – Applying BRW Historic Fire Station Construction Cost
Upon completion of the Budget Analysis, BRW will use their in-house Historic Fire Station Construction Costs database to prepare the first cost estimate. This is the time to consider cost impacts of site development and foundation design. If the geotechnical survey is complete, the difference in costs between a slab-on-grade foundation and a structured slab on carton forms can be significant.
Among site development issues to consider is cost created by distance to utilities such as water, sewer, electrical power, and natural gas. Fire station sites located in residential neighborhoods may face issues in accessing electricity: either a lack of 3-phase power or, if power lines are too low for apparatus to drive under, the utility company will charge a fee to modify service. Another cost may be zoning ordinance requirements for buffering the station from an adjacent residential property or restrictions on architectural facade materials. Another substantial pricing factor depends entirely on the project’s location: in hurricane prone areas or where a tornado resistant room is desired, structural design to resist these wind loads will add cost.
A very important consideration, before starting design, is choosing the building’s structural framing system. Fire station structural frames can be as diverse as tilt-wall concrete, pre-engineered metal, structural steel, load-bearing masonry, light-gauge steel, or wood framing. Each choice has different attributes and costs, and this initial decision will impact exterior appearance and even the building’s floor plan, because of differences in required column placement, structural bay sizes and wall thicknesses.
With the program and initial decisions on site development complete, the first construction cost estimate relies on a historic square foot construction costs to see if the gross building is on target with the budget.
Step 4 – Concept Design SF Cost Estimate
With the start of concept design, the site plan, floor plan and building massing begin to form. More detailed cost-related discussions of this stage in design may include: landscaping ordinance requirements; building code requirements, such as occupancy or area separation walls; exterior image and building materials; Apparatus Bay door types (overhead vs. 4-fold); or roofing assemblies. This is also a good time to discuss the benefit of creating bid alternates to allow flexibility on bid day. The goal is to achieve an awardable base bid, with the flexibility to maximize the budget by selecting separately bid alternates. The best scope for bid alternates is when they involve one or just a few trades, for example, a metal roof is a good bid alternate to asphalt shingles. As the concept design forms, the next cost estimate will still be based on square foot cost, but now be anchored on a concept floor plan and preliminary site layout. This is a critical time to make any major realignment of the project scope and budget, if necessary, before Schematic Design begins.
Step 5 – Schematic Design First Quantity Take-off Cost Estimate
The Schematic Design (SD) phase usually involves more engineering, including civil grading and site utilities, structural foundations and framing, and mechanical / electrical systems. At this time many building products and materials assemblies are considered for life span, performance, energy and water efficiency, appearance, code compliance, and cost. The cost estimate created during SD will be the first quantity take-off estimate, where all major components are measured in linear feet, square feet, or cubic yards and multiplied by a unit cost. Once again, the cost estimate is reviewed and the project scope is evaluated against the construction budget.
Step 6 – Design Development Cost Estimate with Engineering Systems
The Design Development (DD) phase typically involves final selection and approval of all materials and building systems. The DD cost estimate is a refinement of the SD estimate, with more detail. It is the final validation of the project scope before construction documents (CDs) begin.
Step 7 – Construction Document Final Cost Estimate
The challenge with preparing CDs, as related to construction cost, is to not allow “scope creep” into the construction documents. At this stage, owners and designers will inevitably think of small project enhancements, and this is fine, as long as the overall construction cost is carefully monitored. A 95% cost estimate is the final check before bidding or pricing and this is the time to finalize bid alternates.
For the last decade, governmental entities building fire stations have been able to choose from several different methods to award contracts. While the many options offers some amount of flexibility, we have found that fire chiefs and city managers are primarily concerned with one issue: which method provides the most station for the money?
While different methods have their pros and cons, we have found–after working with more than 60 different fire departments–that the two methods which generally offer the best value to our clients are Construction Manager at Risk and Competitive Sealed Proposals. Other methods to consider may include Design Build, Construction Manager Agent, Job Order Contracting (typically for repair and minor renovation) and Competitive Bidding (without consideration of qualifications).
COMPETITIVE SEALED PROPOSALS
Under the Competitive Sealed Proposals method, contracts are awarded based on which contractor’s proposal offers the “best value,” rather than simply the lowest price. In addition to cost, the request for proposal may require a variety of qualifications, including the construction firm’s history, relevant projects, project personnel and their resumes, schedules, and a financial statement. The proposal evaluation criteria must be published with the Instruction to Proposers and are typically weighted by the various criteria.
In many cases, contractor expertise may outweigh the price when ranking responses. This approach is best used in a slow economy to take advantage of the competitive bidding environment, coupled with the ability to select the most qualified contractor.
The chief advantage of the CSP method is the ability to negotiate project scope and cost with the “best value” proposer. If an agreement is not reached with the first selected proposer, negotiations are suspended and re-started with the second selected proposer and so on. The main disadvantage is that the cost of the actual project isn’t known until the proposals are submitted. But with careful cost estimating throughout the design phases by a design team with recent fire station experience, the issue of overbidding is minimized.
CONSTRUCTION MANAGER AT RISK
Under CMAR, the construction manager is typically selected at the same time as the architect. The benefit of this approach is that, as the architect is designing, the contractor is simultaneously reviewing the project for constructability and preparing cost estimates and schedules – all with an eye to keeping the project on budget and on schedule.
In an inflationary economy when the cost of building materials are volatile, it’s wise to have a contractor on board early so that they can, in concert with subcontractors, keep tabs on market fluctuations and prevent a short-term supply shortages from turning into massive cost overruns or missed deadlines.
One of the chief advantages of CMAR is that final pricing by subcontractors to establish or confirm the GMP (Guaranteed Maximum Price) should match previous CMAR pricing, thus reducing the anxiety of unknown cost on bid day. (This approach is best used in a growing economy with inflation.) The GMP may be set at the completion of the Design Development phase or midway through construction documents to “lock in” escalating cost, but this approach usually requires contingencies to cover undesigned elements and requires collaboration between the CMAR and design team to complete the documents within the set budget.
An occasional negative issue with this contracting approach is when the CMAR is too cautious in their early estimates and the deign team reduces the gross building area, it can be quite difficult to add gross area back in, if the project underbids. This risk can be combated by making good decisions early and sticking to them, while discussing realistic contingencies for project scope that isn’t designed.
Because of fluctuations in the economy, there is no one method that will work at all times for all projects. We encourage fire chiefs to be involved in early discussions to examine the pros, cons, and nuances of the various construction delivery methods.
For a more in-depth discussion specific to your situation, please drop Gary DeVries and Ray Holliday a line at email@example.com.