Pearce Construction has had many opportunities to implement cost control and cost reduction methods for numerous clients as a part of the pre-construction services it performed for these clients.

Cost Control, Cost Reduction, and Value Engineering provide an avenue to provide essential functions at a lower total cost. Value = Function or performance / Cost. Value may also be accomplished by improving function without added cost.  Many components can impact Value when referring to Cost Control, Reduction, or Value Engineering, the most common are 1-First costs (capital costs), 2-Life-Cycle Cost, 3-Design-Time, 4-Maintainability 5-Decision Time and 6-Long Range Planning.  These decisions must be made as a team during design in order to maximize value.  This is why it is so critical for begin this process as early as possible.

A recent example of this process was the work that we did on the new McNair/Jemison school.  The project was around $65 million in construction cost and the program had grown to the point that the owner (Huntsville City Schools) needed to find areas in the construction to save money.  Pearce Construction Company was hired to perform a series of progressive cost evaluations along with cost management/value engineering recommendations. Pearce compiled the data and options but the process took place over the entire design of the project.  This process involved the entire design team, the owner, the specialty consultants, and Pearce Construction Company.  In the end, when bids were opened, the low bid was within less than 1% of the projected construction cost.

There are several general areas that we can be of significant benefit.

First is selection of alternative design schemes.  Evaluation of the initial costs of alternative systems, along with their impact (if any) on construction schedule, product life cycle, and potential operating costs allow the design team and owner to make informed decisions.

Second is cost control and value engineering.  During the budgeting process as design progresses, we watch for areas where costs are exceeding what our historical cost data suggest are typical.  This allows review of these areas to determine the driver of the costs and, when necessary, changes to the design to mitigate the above average costs.

Third is evaluation of phasing if required.  At times, the program requirements envisioned may exceed the funds currently available to the project.  We work with the Owner and Design Team to help develop an economical and feasible project phasing.  The initial construction needs to match a logical phasing of the Owner’s program.  At the same time, the phasing should be evaluated to eliminate, or at least minimize cost premiums resulting from future phases and ensure the future phases are feasible once the original construction is completed.

Again, these services are only a part of the pre-construction services we offer.  A more complete outline of our pre-construction services is included and we would welcome an opportunity to review them in detail.