18 July 2011
Chris Paxford with five tips on how to manage costs during a
construction project...
Tip 1 - Timing
Don’t leave it to the construction phase
before you start wondering how you are going to control your costs
- it’s too late by then! Instilling a ‘culture of care’ in your
team right from the outset ensures that costs can be controlled
from a project’s inception.
Tip 2 - People
Choose the right people. If you think back to
your most successful projects, it’s not the form of contract you
remember, it’s the people and the relationships. Work hard to get
the right people on your project and always take time to build a
team spirit and common understanding of the objectives. Run a
workshop with your team and develop the relationships throughout
the project to get the best out of people. When you get a problem
you want people ready to help solve it, not make money out of it.
It helps if you can think in terms of an ongoing relationship.
Tip 3 - Brief
Make sure your brief is absolutely clear. A
good project/cost manager will work with you, challenge and help
draw out the detail of your requirements. Identify the stakeholders
and decision makers. As you engage your design team make sure their
scope of services is clearly defined and be mindful of the
interfaces with the team and, in particular, any design overlaps
where one part of the project affects another. Leave nothing to
chance. Continue to manage the interfaces and co-ordination through
your project/cost manager.
Tip 4 - Change and Risk
Make sure you have a robust and clearly
understood change control process - it’s as much about self
discipline as it is about managing your team of designers and
contractor! Your project or cost manager will set up and manage
your change process in accordance with your corporate requirements
and manage and control the process.
Also, at the earliest opportunity, discuss,
identify and record the risks to your project and allocate a budget
to them. Work with your team to mitigate as much as possible and
make sure you do not shove your head in the sand with regards to
those that are left. A workshop is a good way of dealing with
risks. Also, make sure you regularly re-visit your risk schedule
and review the risks, not forgetting to add new ones when they are
identified (things change). Finally, remember that risks can
develop outside of the immediate construction process.
Tip 5 - Contract
Buy the right thing! Make sure your tender
documentation clearly reflects what you want and the contract you
choose suits the circumstances of the project, your organisation,
and appetite for risk. Don’t get drawn in to choosing the current
fashion – ‘design and build’ might not be best for you. The market
will also have a bearing on your contract choice. Changing markets
and external factors can make different contract forms more or less
attractive at different times in the economic cycle.
Allow time to ensure tender documents are
fully co-ordinated and completed to the agreed level (it isn’t
normal to be doing this at 2am the day before the tender is due out
- whatever the architect tells you!). Make sure the programme is
well developed, agreed, communicated and most importantly managed
and understood.
Chris Paxford (chris.paxford@capita.co.uk)
is Head of Projects at Capita Symonds