This is the 2nd blog in the series Lowering Capital Project Costs.
Facility Owner - How to Organize Your Construction Department
Meeting the capital project budget has a lot to do with the way the Design and Construction Department is organized and manages projects as well as the processes and construction delivery methods that are used. A tight, well-run, standardized and documentable approach at every level will yield far better results than an approach that permits wide-latitude among projects. A construction department that utilizes various delivery models because they are the latest industry hot topic or because of stakeholder influence are not as effective.
The organization of the department and its processes should be built around a fully documentable approach that has institutional buy-in, stakeholder buy-in, user group buy-in and even your chosen Construction Manager (CM) and Architect/Engineer buy-in. They will utilize the same process for every project, regardless of size or scope. This repeatable process will yield a database of costs, for many types of projects. The database in turn provides the department with a baseline of costs that can be compared against CM provided budgets. It arms the department with a powerful tool for base-lining construction costs at many different cost levels, and for comparing and discussing costs with your CM.
This database also provides the department with a wide range of data that enable the construction department to provide senior leadership with conceptual project budgets, literally within hours of being asked, “what do you think this project will cost”? Additionally, a side benefit to this organizational process is minimizing sunk cost and time on projects that don’t go forward.
Other elements that lower cost include contracting that supports your delivery models, IT project cost control and reporting, and construction manager skills training to execute the delivery models. Stop by for the next blog on choosing a delivery model.
Tom Koulouris, CGC MBA
Tom Koulouris is recognized as a dual subject matter expert including hospital operations and capital investments. As a General Contractor, former senior construction manager with HCA, and Capital Project and Infrastructure advisor at Price Waterhouse Coopers (PwC), Tom has developed and practiced many key components to drive down project costs. One process that Tom has used to save significant capital is his ability to understand and implement process improvements leading to higher capacity and increased patient through-put. Tom has also developed and practiced many other techniques for owners to lower project costs. To read more from Tom, visit www.tomkoulouris.com.