As prices rise in the construction market, so does the importance of Construction Management

As prices rise in the construction market, so does the importance of Construction Management

Until now, developers and investors have been used to preparing construction projects themselves. As construction costs increase, the price offered in the general contractor’s envelope comes as an unpleasant surprise to many. And that is what makes them look for solutions and turn to us. At OM Consulting, we offer them three main paths to take in this case, and construction management is one of the most sought-after.

The right price/performance ratio

One path to better projects and greater efficiency takes you to a cost management team that can reduce the “fat” so that the resulting cost is “more digestible.” Because what are we going to say, in the coming period, dieting may well be necessary. In the planning phase, the investor can save up to tens of percent of the estimated cost of the project.

How? The cost management team in cooperation with the architect can find the right ratio between price and performance, do value engineering, look for other suitable technical solutions and offer alternatives.

Cost management + more suitable subcontractor

There is also a second option – to add to the above a negotiation with a potential general contractor of the construction and agree to take part of the supplies out of the offer and create packages that will be tendered separately.

Thus, we are often able to reduce the price of the project by finding a more suitable subcontractor, who then enters into a contract with the general contractor (the volume of open packages can be as much as 50% of the construction).

The solution to date is construction management

The third way is to replace the general contractor with an independent consulting firm – a construction manager. This is a more flexible and often more financially advantageous solution for the investor. A great advantage is the fact that the team includes colleagues from cost management and specialists in all necessary professions.

How does it work? Our project team finds and selects individual subcontractors in cooperation with the investor, which are then managed, controlled and coordinated. This solution saves time and money – typically 10-20% of the GD price due to savings on GD coordination and other markups. In addition, it brings much-needed increased flexibility, because with construction management we can better apply changes to the project that often occur as part of value engineering or client changes.

The only thing an investor has to take into account if he decides to use construction management services is a higher administrative burden. More contracts with suppliers also means more paperwork.

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