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The Value of Designing to the Budget

Because construction projects can be risky it is difficult to determine the cost upfront, which means that cost estimates frequently exceed budgets.  Changing construction plans to fit within budget can have consequences, but the need for the new or renovated building may be such that the owner understands the risk of cutting corners in the design and decides to push the project ahead. To effectively trim the fat on costs without compromising the quality of a project or incurring risks of losses or liabilities, creative architectural and/or engineering design may be needed.

A Case Study: Implementing a Difficult Design Correction

Here is a case study that illustrates the benefit of thorough design plans and cost reviews over having to make retrospective corrections: In this project, a consulting firm was engaged by a county to create the new master plan for their Department of Corrections, located on a 52 acre site.  The site was already occupied by a court house, existing jail facilities and a steam power plant.  The proposed project required the demolition of a number of number of buildings, and the construction of 3 much-needed new residential facilities.

A large part of the site was an abandoned trash pit where an old quarry had been.  It went down about 90 feet after which there was soil with adequate bearing capacity.  Half of the building would be built over the pit, and the entire building was designed with driven steel pile foundations, a concrete slab and frame structure.  A structural slab was required for the section of the first floor built over the pit to prevent the risk of its settlement.  This would significantly increase the construction cost.  Because the state had not yet authorized the county to issue bonds for construction projects and wasn’t expected to do so for another 2 years, the county was under significant budgetary restraints.  A desperate need for the first building led the county to forego the required structural slab and opt for the much cheaper slab-on-grade option.

To reduce possible settlement, the engineering plan was to increase the soil bearing capacity by compacting the soil.  This is done by first stripping the topsoil and then bringing in new fill to compress the subsoil bearing capacity by a process called overburdening, adding a significant amount of soil on top of the subgrade.  Since compaction of the subsoil would lower its elevation, the overburden was actually higher than the surrounding grade. The soil was left in place for six months and then the site was graded according to the construction drawings.

In less than a year the first floor started to settle, and the general contractor’s efforts to stabilize the floor through slab-jacking quickly proved inefficient.  The settlement kept reappearing even with additional efforts and it became clear that the only certain solution was to remove the entire existing slab and replace it with a structural one.  Since the original steel piles included concrete pile caps these could be used as attachment points for new concrete grade beams to support the floor. By this time the county had received bonding authorization which had allowed the rest of the site development to proceed.  Before the design correction project could commence, the board would have to approve the project budget, so a construction estimate of the proposed work was developed based on structural drawings.

This was not a simple project.  Firstly, the inmates who occupied the area would be relocated so the work could be performed throughout regular work hours. Debris had to be removed.  New concrete grade beams poured.  Utility connection which had separated because of the soil settlement had to be re-attached and floor finishes replaced.  Both engineers and construction professionals visited the facility.

But, the board approved and the project went out for public bids. Approval of the final bid that was less than 20% over or 20% under was automatically accepted otherwise the project would have to return to the board for re-approval.  Surprisingly, (but luckily for the county!) the lowest bid was less than 10% over budget.  In this instance the design correction could be successfully executed at a relatively low cost, but retrospective engineering design changes have been known to lead to much greater complications and higher costs.

The Value of Designing to the Budget

An owner making changes to the design of a project to cut costs driven by financial constraints is not unusual.  But the consequences can be costly, time-consuming and can impact the quality of a project.  To protect against this, it’s important for the owner not to wait for the contractor’s proposal and be surprised. Getting a knowledgeable cost review up front, before the commencement of a project is important and making adjustments throughout is very important (for more about pre construction document and cost analysis and budget reviews see here). Having a consultant that is qualified with in-house expertise for important engineering aspects like structural and MEP systems, and engaging the third party review of all aspects of the construction documents and budgets will be a significant asset in reducing construction risks.

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