Working Backward from a Budget
If there’s one thing an estimator rarely hears, it’s the phrase, “Money is no object.” On the contrary, it’s rare to encounter a project in which the budget doesn’t weigh heavily on design decisions. But when construction firms help owners get the absolute most out of every dollar of their investment, they can not only win the work – they can earn a client for life.
Rather than letting design drive the budget – which often results in the need to “value engineer” later in the process – target value design is an approach in which the budget drives design decisions, occurring very early in preconstruction. The concept allows the entire preconstruction team to begin with a validated, estimated cost in mind and then work backward from that amount to maximize the owner’s budget.
Because Beck Technology’s DESTINI Profiler combines 3D modeling with costs tied to each design element, the software provides an easy way for estimators to evaluate the cost impact of various design and material options, helping owners make realistic choices that deliver the most “bang for the buck.”
Informed Design Decisions, in Real Time
At Yates Construction, DESTINI Profiler plays a key role in target value design for construction management. Estimators frequently use the software in the early stages of concept development, showing owners what’s possible within their established budget.
“We can get the architect, construction managers, and the owner in the same room for a roundtable session, shoot a bunch of ideas out and make changes to the design really quickly,” says Yates Estimator Stanley Wielgosz. “If owners say, ‘What if we do this? Push this part of the building in? Add these many rooms? How will it look and what is the cost?’ We can show the impact during the meeting using DESTINI Profiler.”
On a recently awarded school project, for example, Yates brought schematic drawings into DESTINI Profiler to create a 3D model and then applied costs to the elements from the firm’s growing cost database.
“We presented the model in front of the district superintendent and CPA,” Wielgosz says. “They were very impressed with how it looked and that the building was able to have costs loaded already. If they needed to make changes, we could give them pricing quickly based on the design at this early stage. We sold them with the immediacy and transparency.”
In a later presentation to the school board, the Yates team made changes to the DESTINI Profiler model on the fly, trying out various options to demonstrate how the district might stretch its construction dollars. For example, estimators were able to visually demonstrate how the district could save $5 per square foot by choosing a different ceiling material for classrooms.
“They were really impressed by the approach and the intelligence offered,” Wielgosz says. “Using DESTINI Profiler, we were able to work backwards and ensure that we kept the school district in budget as well as offering up smart, cost-conscious design options.”
At The Beck Group, DESTINI Profiler is also a useful tool to align budget, intent, and design to keep projects on track.
Likening the target value design process to setting sail, The Beck Group’s Director of Preconstruction Jeff Ratcliff, notes that the preconstruction and architecture/design teams must launch from the same spot at the same time, keep communication flowing, and work together to reach the same destination. Although the preconstruction team is more cost-driven and the architecture team is more art-driven, agreeing on elements from the very start is critical to keeping the project on course.
One key is for everyone involved to focus on delivering value to the owner, Ratcliff says. DESTINI Profiler helps achieve this by enabling the preconstruction and design teams to explore options together and to communicate those choices to owners so that they can make informed decisions.
“DESTINI Profiler allows us to sit in front of the client and communicate what his building costs, granularly,” Ratcliff says. “I can grow and mask that building out, and I can visually show him design options and quickly make adjustments. With the tool, the owner can communicate where he wants to spend his dollars.”
Because DESTINI Profiler contains historical cost data, including design packages for various types of rooms, the preconstruction team can very quickly create a model based on various assumptions and supply a model-based room schedule to the design team. Cost data are broken down into bid tabs, with smaller budget targets for various elements, such as roofing, exterior, interiors, or site work. Each element is assigned a cluster team that makes decisions about how to meet budget targets.
“We let the architects focus on the creativity, and we can price that creativity, easily,” Ratcliff says. “Using bid tabs lets us focus on targets while bidding out the work.”
The cross-functional team continuously tracks progress against the original budget, updating data along the way to understand the cost impact of each modification. Using this successful approach, The Beck Group’s four Dallas-based DESTINI Profiler users have run more than $1 billion in work through the software in six months.
“DESTINI Profiler helps us communicate, understand where we’re heading, and keep us on course,” Ratcliff says.
At the 2016 Beck Technology Roundtable, The Beck Group’s Director of Preconstruction Jeff Ratcliff shared how his firm uses DESTINI Profiler as part of its target value design process. We invite you to watch his presentation.