Prevent Unnecessary Costs in Building Projects: A Practical Guide

New York City has the highest construction costs in the world, according to Turner & Townsend’s 2018 International Construction Market Survey. Avoiding unnecessary expenses is always in the best interest of project developers, especially in cities where construction is expensive!

Many hidden costs can be removed from the project budget by applying best practices in engineering design and project management. There is a common misconception that you must sacrifice building features to reduce costs, but in many cases, the opposite applies - cost savings and performance improvements are achieved simultaneously.

The following are some common examples of unnecessary costs, which can be eliminated with smart design decisions and effective project management:

• Oversized building systems, especially mechanical equipment.
• Increased material and installation costs, due to a poor layout of building systems.
• Change to correct overlapping equipment locations that were not detected during the project design phase.
• Change orders to correct construction errors found during the final inspection.

Optimize the cost of your next building project.

Avoidable Cost #1 - Oversized Building Systems

Having equipment with surplus operating capacity is not necessarily a good thing. There are many negative consequences of oversized building systems:

Oversized building systems are often the result of “rules of thumb” when selecting equipment. MEP installations can only be sized optimally after a detailed analysis of building loads such as space heating, air conditioning, ventilation, and water consumption. The required capacity can often be reduced with smart design decisions:

• Heating and cooling equipment can be sized smaller if the building envelope is improved. Insulation, air sealing, and optimal window orientation can reduce summer heat gain and winter heat loss.
• Efficient electrical products such as LED lighting and NEMA Premium Efficiency motors reduce the load on the main service equipment, allowing a smaller capacity. Service equipment is normally the most expensive part of an electrical installation, and the savings from a lower capacity can be significant.
• Water-efficient plumbing fixtures not only reduce water bills. They also allow the use of smaller water heaters and booster pumps.

Avoidable Cost #2 - Poor Building System Layouts

Mechanical, electrical, and plumbing installations are not limited to fixed equipment, since they also rely on distribution systems to accomplish their function. HVAC systems deliver their heating and cooling effect with hydronic piping and air ducts, electrical installations deliver voltage and current through circuits protected by conduit, and automatic sprinkler systems rely on a piping network.

The materials and labor used by building systems can vary dramatically depending on how their layout is designed. For example, if you install a chiller very far from the main service equipment, the circuit that powers the chiller ends up being very long and expensive. The cost of building systems can often be reduced dramatically by optimizing equipment positions.

If you must install a sprinkler system to meet Local Law 26, you can reduce its cost drastically by optimizing the layout. A fire protection design that provides full coverage with the lowest number of sprinkler heads saves you capital since the total piping length to supply all the sprinklers is reduced.

Avoidable Cost #3 - Change Orders Due to Overlapping Equipment

When a building is designed using only 2D drawings, equipment location conflicts are not always easy to visualize. This is not an issue in building areas with plenty of open space, but mechanical and electrical rooms can be challenging to represent in two dimensions since many types of equipment must be installed with limited space.

Overlapping equipment locations can be prevented with close communication between the design teams in charge of different building systems, and using a 3D modeling tool such as Revit is also very helpful. Of course, the experience of design engineers also plays an important role - design errors are avoided if you work with experts who are familiar with building codes.

Change orders are expensive because you must modify work that has already been completed, and this means they cost materials and man-hours. Modifying design documents is much faster - when a required change is detected early, unnecessary expenses are avoided.

Avoidable Cost #4 - Change Orders to Fix Errors After Inspection

Even when a project is designed without equipment location conflicts, errors can happen during the construction process. There are two main ways to prevent this:

• Effective project management and supervision. Engineering design firms often offer these services as well.
• Providing clear instructions and specifications in design documents. If there is ambiguity in drawings and other technical documents, contractors may interpret them incorrectly.

In addition to bringing additional expenses in terms of materials and labor, construction errors also delay project completion. When the project in question is a multifamily or commercial building, rent payments are delayed because building occupancy is only possible after correcting all errors detected during the final inspection.

Conclusion

Construction is a capital-intensive business, but there is no need to make projects more expensive than necessary. If you work with qualified design engineers and deploy the best practices in project management, many costs can be trimmed from the budget without giving up on building features and performance. The opposite applies - experienced engineers can often find ways to improve performance simultaneously with cost reductions.