Cost overrun is inevitable if you don’t appropriately plan for each stage of the construction process. Indeed, cost overruns are critical issues that every construction project could be plagued with. How can one reduce these cost overruns? The key to producing a high-quality and efficient project is by adopting appropriate budget controllers, which can be strategically applied in the following areas:
- Project Design Estimates
- Change Orders
- Onsite Management
Effective communication and administration is the key to a cost-effective construction project. To minimize costs, each step of the construction phase should be assessed thoroughly.
Feasibility of the Business
Before the project commences, a feasibility assessment should be done. This could save a lot of money from being wasted. Having realistic expectations of the project outcome and eliminating unnecessary additions can reduce the cost to some extent. A construction service business will often do the testing and analyze the feasibility of the construction process.
Design and Other Construction Services
Construction businesses are long term investments. The structural design should be robust and any risk of needing to change in the future should be assessed and eliminated. Many construction service businesses provide fabrication as well as construction services. For instance, industry leaders like DCM group electrical Contractor provide electrical construction, inspection, and testing, which are integral to the structural build of the infrastructure across all industries.
As the project progresses, there will be a considerable amount of costs to change. These possible design changes should be tackled in the pre-construction process when nothing is built or other building materials have not been bought.
Establishing a scope of work and having full detailed designs doesn’t guarantee that there will be no change orders. These change orders are subject to external factors like bad weather conditions, labor inefficiency or poor quality control of the raw building materials. The cost overrun of these change orders can be minimized by anticipating any plausible areas of changes beforehand and setting up a flexible clause in an initial contract to fit the change orders.
Securing Site and Safety
More than $1 billion in construction equipment and materials are lost or stolen annually, as per a report by the National Insurance Crime Bureau. These are serious losses. Ensuring a more secure job site and accounting for worker safety and that of the construction materials can help in minimizing costs. Securing a safe site will enhance labor productivity. All workers should be equipped with personal safety gears and trained in case of any emergencies.
There are different approaches to minimizing costs. Assess your past projects and identify the areas that incurred maximum costs. This can be done efficiently using field software, which is known to increase the return on investment of any project.