There are times it feels like it's newsworthy to announce a commercial project that came in either on budget or even under budget. But the truth is most projects are undertaken with the expectation that they will be completed on budget, even though that can also be the hardest aspect of the project to complete. Here are a few tips to keep in mind so you, too, can bring your commercial construction project in on budget.
Few contractors are willing to take less profit to compensate for any cost overruns that happen on the project. As such, there is almost no contract written that expects a contractor to take a loss. Change orders are de rigueur, so expect to see them. Even if a contract is based on a fixed price or bid, the contractors and subcontractors can still pass cost overruns on to you. A time and materials contract often means your contractor will end up paying for overruns himself or herself, but even this is not guaranteed.
To keep this from happening, look over the contract carefully. Omissions are the leading cost overrun category. Check the contract to be sure it covers things like permits, licenses, fees, and so on. Also make sure that every aspect of the project is covered in the plans and contract documents. A clearly crafted contract ensures that all parties involved understand exactly what is expected. Never assume anything when it comes to a contract.
Before anything is finalized, have an engineer and / or an architect look over the specs and the plans to be sure they are complete. You should also make sure your project manager is on the same page you are and that he or she fully understands the plans and the project scope before anything gets started. A consultant may be able to give you some advice as well, and because it costs more up front, you could end up saving thousands in the long run.
If your project has anything unusual about it or it will be using exotic materials, be sure these are accounted for in the contract. Also do an inspection if you can of the job location so you know exactly what condition the property is in. Will there be a lot of trees to clear? Is the existing building that will be retrofitted in good shape or does it have water or insect damage?
Make sure you build in an allowance for price increases that may occur between the time the contract is granted and the project completion. This is also very important in a rapidly changing market to keep you on budget.
One last big thing you as the project owner can do is ensure you are all set with the materials that will be used and that the plans meet your specifications. Changing your mind part way through and deciding you want tile floors instead of concrete or a wall removed that was not called for in the original drawings can cost you a lot more than you had bargained for.
No one has a crystal ball and can look into the future with absolute certainty, but doing everything you can ahead of time to anticipate the project's needs will go a long ways towards saving you money and frustration.