
Cost Estimating is Not Just a Numbers Game
By Victoria Cabanos, Founding & Managing Principal, Stuart-Lynn
As cost estimators, our work is grounded in numbers. We typically provide an estimated value of probable cost or analyze numbers for the sake of cost comparisons on a project. However, it is important to understand that a client’s goals affect how we interpret the notion of value. Costs are not absolute and can be defined in one of two ways: the quantitative costs that you can measure and the qualitative costs that can be equally important to a client but are more abstract.
Quantitative meaures like steel tonnage or concrete yardage are the kinds of things that are typically associated with cost estimates and cost reports; such measurements can help clients understand their projects’ price. These are primarily what we call the “bricks and sticks” costs related to construction budgets. Stakeholders evaluate these numbers to determine their financial commitments with regard to the execution of their developments. This information is fundamental, as clients’ programmatic needs will dictate their scopes and, ultimately, the cost of a project. That is to say that if a development requires the creation of a 145,000-sf building, the cost of building that facility must be clearly understood by the client group in order for them to achieve their goal.
However, the qualitative issues that affect a project can be just as significant and, sometimes, even more meaningful to a client—yet they are not always apparent and/or understood by the project team. For instance, a client may have ambitious goals which are directly or indirectly driven by their missions.
Uncovering these qualitative issues with a client may require some exploration. We recommend that the client and the entire design team have a robust dialogue as early in the process as possible that includes multiple perspectives. Quite often, this type of exercise helps to identify the essence of the project goals and clarifies what is necessary and required, even though they may not be typical line items in the budget. That’s because issues which appear less important are categorized as wants rather than needs, and they risk getting lost in the hierarchy. [example?]
For example, the project costs might consider ESG and related investments. In such cases, project teams make conscious decisions to utilize sustainable building practices or support the specification of ethically-sourced construction materials. These types of initiatives extend way beyond the project investment: they can even impact local and global communities, which may be of interest to particular clients.
In the case of the Grace Farms Foundation’s River Building designed by SANAA, the very mission of Grace Farms is represented by Design for Freedom. This affiliate of the Grace Farms Foundation, which works to eliminate forced labor in the building supply chain, was a critical part of the building’s development from the start. Because the client had a clear goal, the entire project team worked in sync to execute a winning project. Its mission was communicated well and carried successfully throughout the design and construction process. All of the team members appreciated the fuller value of this development’s purpose over and above the building’s design and function. The success of the project also depended on the client’s ability to properly align the cost expectations with its purpose, and then pursue this project with all involved parties having a coherent and cohesive understanding of both the quantitative and qualitative goals for the project.
Our work as estimators and schedulers is an intersection of knowledge which comes from our team’s theoretical and practical perspectives and includes an aspect of time’s effect on cost.
– People who are architects and engineers, also people who have experience in the trades
– Times when projects have absolute due date and “cost doesn’t matter” – but there is always a line that they don’t want to cross
Similarly, Schedule may have a qualitative affect where deadlines are absolute or result in an owner to be more or less inclined to move forward with work on a given timeline. More complicated planning could be affected by an ability to maintain a certain schedule and again, will impact the costs. [These first three sentences are unclear]. In another instance, we developed cost-loaded schedules to evaluate the design and construction of a complex renovation project. The overall project involved multiple independent scopes that could be completed concurrently or in consecutive phases. Even though we determined that a sequenced schedule would be the most economical solution to do steps 1-2-3, sometimes you do 2-1-3 to do it faster but it will cost you more, the client decided to do XX in order to meet other mandated objectives [such as?].
– Client may purchase equipment that is not ideal but it’s available…make concessions and fall short of ideal performance specifications in lieu of getting delaying a project and subject to additional costs incurred by delay
– In XX example, the client delayed the purchase of XX and got a better outcome focused on the long term
We were able to provide the client with a deep understanding of the prospective plans that assisted the owner to make critical choices with regard to delivery of the project.
Although our work as cost estimators is ultimately focused on numbers and expenses, clients often make decisions on qualitative issues and do not always rely on the quantitative data alone. Such determinations are up to the client. It is our role to be open and understanding to the client’s priorities and matters of concern. By presenting accurate information and insights, we give each client team the confidence to make the choices that are right for them.
