Saving Money Through Preconstruction Expertise

By Michael Eskew, Mechanical Preconstruction Manager

HPM’s experienced preconstruction team can identify value engineering opportunities that will cut costs for your project, and the sooner we are involved, the better. We can point to preconstruction value stories across the many unique industries we serve, but one recent example comes from a K-12 client who wanted to convert a large retail distribution center building into a modern career and technical training facility. The existing building was much larger than what was needed, but the goal was to incorporate a phased plan that could finish out only what was required for the near term, while leaving the unused space available for future expansion.

The owner was also very interested in utilizing sustainable building systems and for the completed project to be a showcase of technology. This meant the following criteria needed to be included in the design:

• – Infrastructure such as electrical and mechanical systems needed to be scalable in size
• – Systems needed to maximize energy efficiency for utility savings
• – Systems were desired to include long service lifecycles
• – Systems should be current technology, not antiquated designs of the past

The owner selected the design team before HPM was involved, so our preconstruction team was brought on board and asked to analyze the project when it was about 30% through the design process, or as we commonly refer to it, at the “Schematic Design” (SD) phase. At SD, the first thing we typically do is try to analyze the design narratives and documents to see if the best possible systems have been applied to the project. In the case of both the mechanical and electrical systems on this project, major red flags jumped out to us immediately!

The designers had proposed very high-end systems and had done an elaborate presentation to the school system promoting them as the only systems available that would meet their criteria, but they didn’t raise the fact that the first cost, as well as the long-term maintenance cost, was very high. This was partly because they used out-of-date historical budget information and incorrectly interpreted a local contractor’s historical pricing data to come up with a budget amount that was less than half of what this design was actually going to cost. Though it was technically a “scalable” system, for this to be true, additional equipment and over-sized piping mains had to be included in the initial phase to accommodate the expansion for later phases, driving up the first cost even further. Finally, they failed to mention that this system would need a full-time plant engineer on site to keep the systems running properly. 

The design decisions for the electrical systems raised similar application and cost concerns. As with many owners, futureproofing for long-term scenarios resulted in a costly bus duct system, some of which would not even be used on day one. We asked the owner to provide a day-one list of equipment. From that, our team was able to recommend three separate options of varying day-one cost savings for the owner and designer to consider. All three options still provided some level of futureproofing, but at a significant cost savings over the initial design.

HPM recommended alternative HVAC and electrical distribution systems that still achieved all the criteria above, but at lower initial costs, as well as reduced maintenance requirements. The suggested Variable Refrigerant Flow (VRF) HVAC system equals the efficiencies of the proposed hydronic system with a very similar lifecycle, but with minimum routine maintenance, which could be performed by the school system’s existing maintenance staff. And VRF is truly scalable with only the equipment needed for the current phase required to be installed initially. Any future expansions can be added modularly, so there is no impact on the initial project’s cost. HPM also pointed out how the designers could easily and quickly convert their initial hydronic design to the VRF design to maximize previous design efforts and minimize impact on the bid schedule.

Our team completed detailed system information and priced the design with current market pricing from trade partners, vendors and pricing services, showing the project was in real jeopardy of being several million dollars over budget. The suggested alternative systems were discussed with the owner at length, and the cost savings to implement them was shown to be in excess of $2M. These savings showed that these changes could potentially put the project back in line with the owner’s original budget for the initial phase.

In the end, the owner directed the designers to implement our suggested changes. However, because they waited until documents were almost completed for bid, the redesign ended up adding a few weeks delay to the bid schedule that could have been avoided if the decision had been made sooner. When the project did bid, the mechanical and electrical bids came in exactly where HPM budgeted, saving every dollar that we said we would. A project that was in danger of cancellation because of a serious budget shortfall was saved and moved forward.