Top 5 ways to save money on construction projects

In order to save money on construction projects, you must in fact have construction projects running. This is a very fundamental necessity of the construction business. No project, no paycheck, no savings for the owner. It’s really a very simple situation – we need to get banks to loan money to developers who will then go out and pay architects to draw buildings who will then wipe their hands clean of the design upon hand-off to the contractor who will turn around and blame every cost and schedule overrun on the architect until everybody lands in court fighting over money. It’s really a lovely system we have worked out, but without the initial financing from the bank, our diabolical plans cannot even begin.

Hey bankers! Yeah I’m talkin’ to you! Start loaning money damn-it!

Once our friends in the cushy banking offices up in Manhattan put down their Cuban cigars and close out of solitaire, we’ll have plenty of money with which we can build houses, retail and office space, condos, etc. So when that day comes, the following five items will help everyone save time, money, and lots of Advil.

5. Be nice.

Maybe it’s just me but if someone is a jerk (and most are), I really don’t feel like doing them any favors. When I worked for a sub, I would give breaks on change orders if someone wanted to work together and come to a sensible solution. If I was hollered at, belittled, or had a finger pointed in my face, the change order amount started to rise. Plus it made me never want to work with them again. And if I did bid a job for them, I would skyrocket the price.
Contractors are more sensitive than you think, if you piss them off, it’s just going to cost you money.

But again maybe that’s just me.



4. Be careful with changes

There are three truths in life: death, taxes, and changes to construction projects. And man, they are friggin’ expensive. However, we must realize that putting a design out to bid that is not complete or requires changes may allow a project to commence sooner and thus complete sooner. So if you do make changes make sure they are made in enough time to solicit bids from the contractors, collect pricing and negotiate the cost all without affecting the schedule. If the subs have to perform the work prior to receiving the change order you’ll never come to an agreement on the cost and if the number is high enough, you’ll land in court.

There is nothing wrong with establishing a unit cost for all changes prior to entering into contract. But just like the best way to avoid an STD is to not have sex, the best way to avoid costly change orders is to not make changes.



3. Can anyone say 3-D?

The capabilities of three dimensional CAD programs, otherwise known as building information modeling, are just beginning to become known and explored. There are of course the obvious benefits of conflict resolution with everything from a door swing to MEP and steel coordination, but the benefits reach much further.

I’ve seen millions of dollars thrown in the street due to lack of drawing coordination and conflict resolution in the field is extremely expensive. Often times the conflict will be partially fixed or not fixed at all which detracts from the quality of the project.

Beyond conflict resolution, the entire job can be estimated and viewed in three dimensions prior to lifting a shovel. The construction process can even be modeled in 3-D to look for conflict of equipment. I recently worked on a casino where concrete cranes and steel cranes were working in very close proximity. We didn’t use BIM but it would have helped significantly to avoid delays caused by cranes being too close. The steel contractor submitted a $200,000 change order for delays caused by the concrete cranes.



2. Be clear about expectations

I don’t know what it is with lawyers these days, all they do is stir up trouble. They’re like the kids in the back of the classroom that shoot spit-balls at the nerdy kid with glasses just waiting for him to snap and go postal. I guess they need to pay for law school somehow.

But regardless of the reason for the tendency of lawyers to cause conflict, even the most benign attorneys will look at the construction industry and see the bright lights of Vegas. How do we stop hungry lawyers from feasting on the profits of owners, designers, and contractors? We need to clearly define our expectations.

The construction disputes that I have seen mainly involve situations that could be easily discussed and agreed upon prior to entering into a construction contract. I don’t know if people are too afraid or just too lazy to bring this stuff up, but it needs to be discussed. How hard is it to ask what will happen in the event of a schedule over-run or how overtime rates will be handled? Will change order pricing be at an agreed upon unit rate or left up to the contractor? How will coordination issues in the plans be handled?

These are the same issues that come up time and time again, but we still refuse to bring them up in the contract. Perhaps we’re afraid of getting the project off to a bad start or souring relationships before the job begins, but a slightly uncomfortable conversation early on can prevent a torturous battle through mediation, arbitration, and court.


1. Pre-con, pre-con, pre-con!

Above anything else, the more time spent in planning, the less cost and schedule overruns you will have during construction. However, we must be careful about over-analysing the project and bringing it to a halt. You have to remember that every day the building is not open is lost money for the owner, so we could talk forever about what kind of foundation to use, but the more we him and haw about it, the more we’ll have to accelerate the project during construction.
Pre-con is not as easy as picking the lowest cost for every material and contractor, it is very much a balancing act in an effort to get the project on line in the shortest amount of time with the lowest cost and highest quality. It’s difficult if not impossible to get all three, but the purpose of pre-con is to maximize the overall value of the project.

For example, if an evaluation is being made as to if you will be using steel or concrete for the structure of the building, one may point out that concrete is less expensive and should be used. However, steel will erect faster and may be less likely to encounter material shortage problems throughout the project. In light of this additional information steel could become the more prudent choice.

Pre-con will often be skimped on in an effort to break ground and save money in the short term, but a little more effort early could make construction less painful and the courtroom less likely.

Feel free to add some of your own tips on saving money on construction projects.

Top 5 ways to save money on construction projects

Berlin Wall: Concrete that did much more than just crack.

I was eleven years old when the Berlin wall was brought to the ground and at the time, the Cold War was in full gear and I remember being excited that what I believed to be a symbol of evil and corruption was crumbling to the ground.

Twenty years later, I was able to visit the hip and happening town of Berlin and see, before my own eyes, the concrete wall that split the city.

I always thought the the wall was one section of concrete or brick and if you were on one side you were in East Berlin and the other side was West. This may have been the case during the early years of the wall, but for the majority of its life, there was a 100 meter "no-man's land" separating two walls - both of which residing in East Berlin. No Man's Land was later named the "death strip". At least 100 people were killed trying to escape East Berlin, however, there were about 5,000 successful escape attempts including a hot air balloon ride over the wall, and sewer excursion under the wall, and driving a sports car through the wall.

The Berlin Wall actually had four phases:

Wire fence (1961)
Improved wire fence (1962–1965)
Concrete wall (1965–1975)
Grenzmauer 75 (Border Wall 75) (1975–1989)

The Berlin Wall and the Intra-German Border 1961-89 By Gordon L. Rottman andChris Taylor gives the following description of the earliest form of the Berlin Wall.

The first, expedient walls were low, and made of a variety of different building
materials, such as bricks and concrete blocks. These were rapidly replaced with
prefab concrete slabs, blocks and beams. The workmanship was crude, with speed
being the major concern. Rubble buttresses bad to be built to support some
sections. Lookouts and guardposts began to appear. Steel hedgehog
anti-vehicle obstacles were placed on streets. Wooden towers began to appear
every 1000m with searchlights sweeping barbed wire, and broken glass was cemented atop the walls. Log and earth lookout bunkers were positioned between the towers. A car driven at speed could crash through these walls in many places, and some of them crumbled after heavy rain as there were no supporting foundations.

The "fourth-generation wall" known officially as Stutzwandelement UL 12.11 (retaining wall element UL 12.11) was the final and longest lasting version of the wall. It was built from 45,000 separate sections of pre-fabricated reinforced concrete each being 3.6 m high and 1.2 m wide. Each segment was 22 cm thick at the base and 12 cm thick at the top. The top of the wall was lined with a smooth sewer pipe 30 cm in diameter intending to make it more difficult to scale. Below is a blueprint of UL 12.11.

The cost to erect this new sophisticated wall from 1975-1980 was $3,638,000 USD.

On a side note, the current construction market in Berlin looked far from stagnant. Everywhere I turned there was another tower crane or construction site. Certainly much different than what is going on in major cities in the US.

I briefly thought about applying for some construction jobs in Germany since I saw so much going on, but I quickly realized that I didn't speak a lick of German and I ascertained that work in a field like construction which is heavily dependent on verbal and written communication would be quite difficult. Maybe I'm wrong, and if things get much worse I hope I am, because I may be on the next flight to Berlin.

Berlin Wall: Concrete that did much more than just crack.

Back in the U.S.S.A

Back in the United (and Stimulated) States of America. Woo-hoo!

After over three weeks of overseas travel, as well as domestic vacation where I just didn't really care what was going on, I've returned to reality and removed my head from the sand trap to take a look at where we are in our quest toward economic recovery and growth. However, I'm tempted to run back to the airport and buy a one-way ticket to Anywhere But Here.

I was expecting to come back to a country pumped with more stimulants than a first grade honors English class, but what I've found is something that more closely resembles a mandated Saturday morning alcohol awareness seminar that even a well operated meth lab couldn't bring to attention. What happen to our $800 billion worth of Adderall and Ritalin that was promised to bring our sleepy, dreamy economy back on its toes and actually participating in the 7:30 AM Pledge of Allegiance? Well, I decided to do a little research and see where we're at.

Just to evaluate where we are, I found that the US unemployment rate is at a gaudy 9.5%. However, construction industry unemployment according to economajic.com stands at 17.4%, however this is off it's recent high of 21.4% in February '09 which is at least movement in the right direction.

As far as construction billings go, the data is not so promising. We're still at declining levels and while the decline seemed to be slowing for a while, the latest numbers are showing an increase in spending declines. Econoday.com provides the following chart of construction spending for the past two years.

So what about our much anticipated and much needed stimulus package? Well, the following chart from Recovery.gov shows the timeline for funds being made available for the next seven years. The majority of this money will be dolled out in fiscal year 2010 which starts October 1, 2009, so we've yet to see the flood gates open and we are painfully awaiting its arrival like an avid West Virginia kayaker would before opening day of Gauley season where the dam controlled flow of the Gauley River is allowed to run wild.

So why does the majority of this money come out in FY 2o1o and not immediately? In my opinion, it's an effort to avoid fraud and corruption that could easily be associated with a massive flood of federal money into a greedy and hurting economy. However, this is still a federal spending plan that dwarfs anything preceding it, so a little patience now may pay off in the long-run. I'm hopeful that this plan will not only provide a solid backlog of construction work for the next decade but will also provide some much needed infrastructure and capital improvement that will help people work and live better which could also help our country economically.

Just keep chanting - The USSA ain't far away.

Back in the U.S.S.A

What do Scotland and Google have in common?

If we were taking a standardized test, the correct answer would read: golf is to Scotland as Google is to search engine. However, there is no prep course or line of computer code that can prepare you for playing the Old Course at St. Andrews.
It is believed that golf was played in this portion of "links" land in the early 1500s making the Old Course truly live up to its name. I just kind of gazed out on to the open land and kind of realized how a game like golf would be invented here - in fact, it makes perfect sense. If the sheep herders didn't invent it, I certainly would have on my first European vacation.

Although I'm not a huge history buff or expert on the invention of earth moving machinery, I am fairly certain that back in 1500 they didn't have the earthwork luxuries of today. The land was left very much in its natural state and grass was cut to different lengths and holes were placed in the ground - it was very simple. The deep pot bunkers in Scotland are "revetted" where layers of sod were placed on one another to form a wall on one side of the bunker and making each bunker more or less a one stroke penalty. However there is in fact a reason for the revetting - with the coastal nature of most links courses, the bunker walls keep the sand from blowing all over the course while they also prevent players from shooting very low scores.




So who built the Old Course at St. Andrews? There are many contributors throughout history through renovations and what not and I'm sure somebody had a rough plan of what they were going to build back in 1500, but the real owner, architect, and contractor were the land, the wind, and the sea, collaborating on a fantastic joint venture.

What do Scotland and Google have in common?

Off to Europe..and a trivia question

I'm in the midst of a World tour starting in Mackinac Island, MI and ending in San Francisco, CA with stops in St. Andrews, Scotland, Berlin, Germany, and Los Angeles. Trust me, you don't even want to see my flight itinerary. But really I'm not expecting you to care too much about my travels, however you may be interested in some of the construction in Scotland and Germany. I'm going to post some info about the buildings and/or construction market in Scotland and Germany so be sure to stay tuned (like I even had to ask).

Trivia Question:

For what construction project were hard hats first invented?


Send your answers to poolejohn@gmail.com and if you are correct you will get a set of bagpipes (no, just kidding).

Off to Europe..and a trivia question

Is all this Green stuff a bunch of bologna?

It's hard to go anywhere anymore without somebody trying to sell you on something that is green this or green that. Everything has to be green these days; it's the new thing. And even though I'm a strong proponent of all this green stuff, I still wonder at times if all of this is just one big pile of profit driven bologna (pronounced baloney for some reason probably because Americans are too lazy to use the correct Italian pronunciation).

I've heard several very strong arguments for the existence of global climate change and very few for it's non-existence. Actually George Carlin has given me the best argument against global warming I have ever heard:

Save the planet? We don’t even know how to take care of ourselves.

I’m tired of f***ing earth day. The planet is fine, the people are f***ed.

Think about it this way, the planet has been here for 4.5 billion years and we've been here for 150,000 and engaged in heavy industry for just over 200. The earth has been through a lot worse than us: earthquakes, volcanoes, plate tectonics, continental drift, sun storms, solar flares, sun spots, magnetic pole reversal, tidal waves, comets, asteroids, worldwide floods, ice ages.

And we think some plastic bags and aluminum cans are going to make a difference. The planet isn’t going anywhere. We are.

Pack your sh** folks because we're goin' away!

As Mr. Carlin points out, humans have only been on this planet for about one three hundred thousandths of a percent of how long this planet has been here. So if the earth has been here for a year, humans have been here for about 17 minutes 30 seconds. (Go ahead and check my math there, but I think that's right)

We'd have to be the next Jack Bower to do that much damage in such a short amount of time.

There a few things that nobody is disputing. The Earth's temperature has definitely risen about 1 degree Fahrenheit in the past 100 years, and we can go on to say that most scientific organizations agree that this phenomenon is caused by human activity. But it's only 1 degree! Well, maybe 1 degree doesn't have a huge impact, but three, four, or five degrees certainly would. That turns winter snow storms into rain, and hot summer days into unbearable heat waves.

A climate change of such magnitude could also include glacial retreat, arctic shrinkage, worldwide sea level rise, changes in crop yields, species extinction, increased spread of malaria, dengue fever (I don't know what it is but I don't want it), Lyme disease, hantavirus infections (I'll pass on that too), bubonic plague, and cholera, and an increase in severe weather.

So if the earth has been here for a year, we may have just pulled a Jack Bower in about seventeen minutes.

I still hear the mumbling occasionally from people who think the whole thing is some liberal elitist farce that will do nothing but damage our well preserved, global leading, powerhouse of an economy (at least it was). Maybe they are right. In my opinion, there is about a 0.5-1% chance that this whole thing is just a big joke put on by those with just as much wit and cleverness as George Carlin.

But that leaves a 99-99.5% chance that this isn't a joke and we could be well on our way to catastrophic climate change. And while my arbitrary determination of the risk of climate change actually being true could be way off, honestly, it's probably not.

Is all this Green stuff a bunch of bologna?

5 ways to negotiate that job offer: From a seasoned expert

For better or worse, I've had the wonderful opportunity of spending a significant amount of time during my relatively brief career not working on jobs, but looking for jobs. Having graduated from school twice, quitting jobs three times, and being laid off twice has given me the opportunity to explore strategies at getting a job. I've landed five jobs in my career and the negotiation has been anywhere from me saying, "That's fine" to giving them a list of items that must be incorporated into the job offer. Sometimes they say no and sometimes they say yes, but it's never bad to ask. Taking a job is a huge commitment and if a company gets irritated with you for trying to get the story straight before you take the leap, then screw them because if nothing else you're trying to make upcoming years as productive and pleasant as possible for both parties, so it is in their interest to in the very least listen to what you are looking for.

I know there may not be many job offers flying around right now, but there are certainly a lot of people out of work, and the job offers will be rolling in soon. So once they do, you'll need to be prepared with the following list (just don't bring it to the interview).

1. Get a six month review written into the offer - One of my professors in grad school made this suggestion and I just did it for the first time with my most recent employer. It is fantastic strategy because there is no way for them to say no. How can you not give an employee a review when they ask for one? When the time comes, I doubt they will bring it up so you will have to. If they give you some line about how they're too busy or you have nothing to worry about (performance wise), insist on it happening. If they still don't do it, write them an email of a "self-review" and at the end ask them to respond with comments on how they think you could improve your performance then give them a deadline. This is job security at its finest. Keeping people in the dark about what they are doing wrong at work should be illegal, and construction companies love it because its easier to just fire you than give you things on which you need to improve.

2. Don't talk turkey - If you're asked how much money you want to make during the first five minutes of an interview I would walk out unless you've had significant background discussions before this. This just shows that they are looking to fill a position required by either a client or executive and don't really care about what you're capable of doing. Saying things like,"I've decided that I am not going to request a specific salary during my job search," is far from out of the question. If there is a salary box on the application, leave it blank. Let them make the offer and go from there. The number they offer should tell you how much they want you to work for them.

3. Get a severance written into the offer - This is of particular importance if you are relocating for the job because not only are you leaving a job but you are leaving a network of contacts that could hire you if you lost your job. Suppose you move across the country for a company and they decide they don't like you after about six months. They'll fire you and claim that you haven't been working there long enough to deserve a severance. If you are leaving a job and a location you need to have the assurance that if you lose your job you'll have income for at least three months after you're laid-off. Last ones in are usually the first ones out when things start to slow down - trust me.

4. Be confident - They gave you a job offer because they want you to work there - it's not charity, it's business. They think you can make them money and maybe, just maybe, they like you as a person. There is nothing wrong with asking for more money, more responsibility, or telling them straight-up that you want to run this friggin' place one day (if that is in fact the case, of course). You of course run the risk of intimidating them a bit, and making them secretly afraid of you bulling them over and pushing them out of their jobs, but I think the risk of that is low. Try to get in the driver's seat - beggars can be choosers.


5. Don't believe a word they say - They may be nice people with a cool looking office, but if what they say is not clearly written in the job offer, it won't happen. This is very important with construction companies because they often have jobs in undesirable locations that nobody wants to work on. They may say something like, "We're going to send you out to this job in Timbuktu for a few months and then move you back here." A few months turns into a few years and the next thing you know you're running for mayor of Jim Thorpe, PA.

This also applies to any verbal promises or implications they give you in the interview involving commission pay, profit sharing, advancement, salary increases, and responsibilities. I know this is a painful conversation to have and you run the risk of them thinking you don't trust them, but you can explain this by saying that this is your policy for all the job offers you are getting and while they seem like a fine group of people, it's better for both parties to clearly document expectations.


Negotiating is fun, employers like doing it too, so don't be afraid to play a little hardball.

5 ways to negotiate that job offer: From a seasoned expert