The Preconstruction Ecosystem—Pt.1: Is Preconstruction More Than Just An Estimate?

Preconstruction is a very complex process in a project’s development lifecycle. It involves many different processes within a universe of ecosystems. On the outside, the preconstruction workflow may appear to be random or sporadic, due to the fact that all of its processes are non-linear. However, unlike the construction phase—which often has a clear, linear and repeatable process—preconstruction is a series of processes that are iterative in nature.

Processes in preconstruction evolve with each stage of the project, and many times you will have to come back to a particular process in order to make adjustments for future stages. Each process is constantly in play as you are developing the plan that coincides with the direction of the design, as well as the owner’s needs and objectives. The intricate nature of the stages of preconstruction stems from the fact that not all processes can be worked on at the same time and are not done in any particular order. 

Preconstruction is often misunderstood by those who don’t work in this part of the project’s development lifecycle. The most common misconception is that preconstruction and estimating are synonymous. In fact, the assembly of an estimate is a critical work effort as part of the preconstruction phase but is not representative of the entire array of workflows that occur in preconstruction. The entirety of preconstruction is much broader than just an estimate. And so, we have started this three-part series on The Preconstruction Ecosystem to help identify some of the common processes within preconstruction. Below are the first five processes we are breaking down.

Understanding Preconstruction Workflow Ecosystems and Best Practices

The Estimate

An estimate is the detailed cost breakdown of the material, the equipment and the labor required to provide and complete installation of a particular work segment. As emphasized above, because the estimate is such a critical part of preconstruction, oftentimes it is assumed to be synonymous with preconstruction—which is not at all accurate. The estimate is a key component of the broader preconstruction array of services.

The preconstruction industry has a series of estimate code standards that effectively structure the estimate—such as how to code and organize the costs—which are widely utilized across the industry. Additionally, these estimate code structures are closely aligned with The American Institute of Architects (AIA) specification standards for a project. This provides a great foundation upon which to leverage estimate data across all projects. There are numerous construction estimating software calculators available for Contractors to use to assist them with this process.

Value Engineering (VE)

Value Engineering is a process implemented to evaluate design options or other costs to the project in order to make adjustments to the estimated cost. It is typically implemented when the design is estimated to be over budget. The process involves deleting or downgrading elements of the project in order to get back to the desired budget threshold. This breakdown involves additional time spent by the team and often results in the redesign of portions of the project which is inefficient and costly. 

Value Engineering is typically used in a reactive way, by quickly identifying anything and everything that you could swap out for something less costly, or something slightly faster in order to be able to cut costs out of a project. Value Engineering is a necessary evil in many projects and can be viewed as a wasteful process that brings a lot of tension to the project. 

Target Value Design (TVD)

Target Value Design involves a formalized collaborative delivery structure that involves the Design team and Contractor working together to create an informed budget target that works within the overall project budget. This can be done using data from previous projects or other sources to determine what a reasonable target should be.

Many project teams are moving towards Target Value Design instead as it is a more proactive, continuous process that encourages establishing a target budget amount for a specific system or element of a project. The Designer, Contractor and Owner are then guided to identify design solutions in advance of the design work that will achieve the target budget goal with the intent to design it once and be on target.

Both Value Engineering and Target Value Design go hand in hand with the estimating process and act as a health check to make sure the project budget stays on track.

Project Risk Assessment and Mitigation

Project Risk Assessment and Mitigation is a process implemented to reduce the impact of risk in preconstruction by measuring and controlling it. There are a myriad of major risks that can affect the success of a project. Many of these risks manifest themselves early in the preconstruction phase of a project but do not present themselves until well into construction. Identifying and implementing mitigation strategies to eliminate the risk from the project early on is a critical step in ensuring a successful and predictable outcome.

Project risks such as supply chain issues, labor availability, changes in law, sub-surface unknowns, market escalation, etc. are all expensive risks that are near impossible to eliminate during the later stages of a project’s development cycle. The preconstruction teams’ focus on proactively de-risking the project is just as valuable as estimating the costs of a project.

Historical Comparable Projects

Historical Comparable Projects refers to the ability to predict or validate a project at the earliest stages with project data from previous projects. This is a common practice to attempt to ensure the budget is properly set. As completed projects become older or more out of date, legacy project costs need to be adjusted from their original time frame to the time frame of the current project to account for inflation and sometimes differences in geography.

Given that every project is different, the process of comparing previous projects is not an exact science, but should be treated as a guideline in which to provide a level of assurance. 

Summary

Because preconstruction is elaborate and complex in nature, there tends to be an incredible amount of inefficiency, with teams having to constantly revisit different, independent and informal ecosystems of workflows. The process can become very tedious and the manual effort it takes to keep up with the details can take a lot of time. 

ConCntric was founded to unite workflows, data and people to provide an unparalleled certainty of outcome and trust.  Our first phase is to digitize the best of the best practices in preconstruction workflows into something that is an industry best practice. Our platform focuses on the 80-90% of preconstruction practices that are common across all projects, users and companies. ConCntric helps companies achieve operational efficiency by providing a platform that helps standardize all processes, while still remaining flexible enough to accommodate the unique needs of each individual project. By digitizing and connecting all workflows involved in the preconstruction phase, data is more easily shared and leveraged which ultimately helps make for a more efficient ecosystem.

How ConCntric Helps Preconstruction Processes Succeed:

• The Estimate—ConCntric strengthens your estimating efforts by adapting to your existing estimating software. Our preconstruction software gives visibility to a relatively standard approach used by all companies and is meant to serve as a one-stop shop for teams to work in. ConCntric is ultimately a complement—not a replacement—to the processes companies are already following.

• Value Engineering & Target Value Design—ConCntric structures value engineering and target value design efforts by offering solutions that help you get to your target. ConCntric can help you better communicate your findings through graphs and other visual elements, thus diminishing hours of manual data entry and presentation set up. Our platform leverages historical information and experiences early in order to eliminate the over budget items that the team cannot afford to focus on, allowing you to design and estimate projects with greater accuracy.

• Project Risk Assessment and Mitigation—ConCntric’s Risk Register makes considering risk in your project easy. Our platform aids in de-risking your projects by managing all of your data under one roof. The Risk Register supports your team in identifying risks in your project before they become an issue and could ultimately save you and your team valuable time and money.

• Historical Comparable Projects—ConCntric’s Calibrate and Classify systems allow you to structure your project data according to an established industry standard, amplifying the power of your data. Most companies are not storing their data in a way that is useful to their current or future projects. Using ConCntric’s platform, you can make sure that your comparable project data is readily available from one project to the next, making the budgeting process more automated and practical.

This blog post is the first of our three-part series on The Preconstruction Ecosystem. To stay up to date on when part two will release, follow us on our social media accounts and subscribe to our monthly newsletter here.

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