Guest Post: National Benchmarking Study and DESTINI Profiler Model Brings Clarity

Guest post authored by Steve Loneman, Director of Preconstruction at LeChase Construction

ProfilerLeChase Construction recently completed preconstruction services for a municipal building in Durham, North Carolina that faced budgetary challenges.  To support definition of these issues, LeChase utilized DESTINI Profiler.  The project consisted of a 125,000 square-foot building and an 180,000 square-foot parking garage on a 5 acre urban site.

The project had been in planning for a number of years, was the largest building project the municipality had performed to date, it was controversial within the community, and it represented a very large percentage of the municipality’s capital expenditure budget.

The design team suspected that the original owner budget for the complex program was too low for this specific type of facility.  The design team was on a fixed design budget and LeChase was on a fixed preconstruction cost contract – neither of us could afford to enter into design without confidence we were heading in the right direction.  Not to mention the impact a budget issue would have for our customer.

To support this effort we chose to utilize Profiler for its unique ability to associate a visual building model with a cost estimate.

Utilizing the extensive programming report and early block modeling of the project we produced a Profiler cost model.  The Profiler cost model for the complex was $357/SF of building.  The owner budget was $266/SF. A 34% difference!

Compounding this issue was that the owner had hired a cost consultant to provide his initial budget information and they were confident in his work.  Not only did we have to work through a large budget issue, we had to convince the team that our number was accurate.

The combination of visual with cost through the use of Profiler brought instant credibility to our cost model.

In addition to providing cost certainty, our cost model indicated that the program with the approved layout and number of floors as shown in the designer block models would not fit on the site.  Based on the block models, the first floor was extending into the street to accommodate the program.

To provide further support for the budget, we conducted a benchmarking study of similar projects across the country to provide insight on the potential budget issue.  These benchmarked projects were cost adjusted to our location and timeframe to create comparable costs.

The benchmarking study indicated that the average cost for this type of facility was $353/SF (median cost of $357/SF).  Our Profiler cost model was $357/SF … keep in mind that this was done prior to the benchmarking.

This study prompted a programming change to maintain the original budget level for a smaller building.

The formal public bidding of the project was recently completed with the project cost coming in $2 million under budget at $376/SF.  The increase of the overall square foot cost of the program based on the building square footage is attributed to having many fixed items such as site and parking that did not change even though the building became smaller.

The LeChase Profiler model brought clarity and confidence to the budget with a visual and was confirmed by benchmarking.  This initial cost model was utilized to provide UniFormat level budgets that we measured against throughout the development of the project to keep the project on track.