How Do You Price an Elephant?

How Do You Price an Elephant?
Rivlyn ManningZachary Bergeron  
November 19, 2020

As construction economists, we encounter our share of elephants: a high-tech mechanical system, complex façade geometry, adjusting costs for a pandemic, etc. But, what do you do when a client asks you to price a building that resembles an elephant?

The design firm that we engaged with was pitching this build as part of a design competition and was relying on us to inform them of the project’s affordability. Rather than throw our hands up, we rolled up our sleeves and employed the necessary “parts and pieces” approach. 

There was not a need to get ‘buy in’ from the design team, the design team was a full partner in the process of developing the estimate.

Collaboration

The proposed design had a meaningful purpose and our understanding of what the design was intended to represent was key to the success of this effort. In addition to doing the necessary research to begin the architectural design, the client was up to the task when it came to understanding how to construct the building. For both ourselves and our design partner there was an agreement that the building needed to make sense both from a constructability and a cost point of view. Meaningful dialogue and renderings, coupled with the design submission, were imperative communication tools that allowed us to build an iterative cost model. Using our database as a validation tool, we were able to fine tune both design and dollar targets for architectural, structural, mechanical, and electrical disciplines. 

Fundamentals

A positive externality of practicing the fundamentals of estimating is that we’re ready to take on a variety of variables and weave them into a client’s estimate. Adherence to our processes was key to our understanding of the elephant in the room. We were able to quickly introduce our findings to the design team, which they were then able to challenge – prompting collaboration to ensure the best estimate possible was being put forward. In concert with the architect’s design tools we were able to produce an estimate that was vetted both from our perspective as construction economists and from the architect’s perspective as a design professional. 

Teamwork

Internally, the idea of putting our strongest team ‘on the floor for the game’ was an important strategy for Vermeulens. We believe we have a very deep bench and knowing each person’s individual strengths helped us assign the right team for the project to divide and conquer. The strategy may be to take one piece at a time, but when you have a competent team working collectively you can make a major impact all the faster.

Summary

From the construction economists’ point of view, the map to a successful cost model of a unique and challenging project can be expressed in a few steps:

  • Understand the elephant. While comparables are invaluable from a cost benchmarking point of view, nothing beats talking to the design team.
  • Trust the process. Our processes are designed to facilitate cost modeling: ask pertinent questions, create a model that has inherent checks and balances, divide the work intelligently.
  • Internal and external collaboration are the keys to providing the client with an estimate that both Vermeulens and the design team understood and have faith in.
Rivlyn Manning

Rivlyn Manning
Associate Principal

Rivlyn has been in the industry for over 3 decades. Drawing upon his history background, he enjoys working on cultural and socially significant projects.

Zachary Bergeron

Zachary Bergeron
Associate Principal

Zachary has been in the industry for over 2 decades. He is interested in the company’s more complex and challenging projects.

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