Roundtable Review – On Time, On Budget
On Thursday 3/25, we held our March members’ Roundtable On Time, On Budget.
Regardless of the discipline, delivering projects on-time and on-budget is always difficult. When the project is a building, with many collaborators and high financial and physical risks, on-time and on-budget delivery can seem like a fantasy. Nevertheless, there are methods, teams, approaches and collaborators that succeed.
This discussion was co-led by two Brick & Wonder members with many years’ experience and a variety of industry perspectives. We talked through the things that most often cause our best-laid plans to become derailed, and some of the tools we can use to get things back on track.
Video & Audio Replay + Notes
Brick & Wonder members can access to the video and audio recordings, session notes and attendees list here.
Meet the Co-Leaders:
Victoria is a trained architect and construction professional with over twenty five years of experience in the construction industry. She has worked on a variety of project types in a diversity of roles, including project architect, production engineer, construction supervisor and project manager. With an extensive knowledge of materials and methods and an integrated understanding of the entire construction process she has successfully demonstrated a skill set which includes designing, directing, budgeting, scheduling, resource management and vendor contract negotiations within aspects of the construction industry. Her company is Stuart-Lynn.
For the past 15 years Jon’s company, Steering House Design and Development, has completed or is actively constructing over a quarter million square feet of high end residential space throughout brownstone Brooklyn. Steering House projects are generally complete gut renovations of existing structures with new construction components including both horizontal and vertical additions. Many have required significant excavation and underpinning of neighboring structures.
Key Insights:
We changed our overhead allocation system – it’s now a product of time – and we have a formula that defines our weekly and monthly overhead allocation for project. If a schedule is extended by a change order, by client indecision, or anything outside of our control, so is the overhead and this is clearly defined for us in advance and to our clients and in our contracts. So it doesn’t come as a surprise to anyone if costs go up. We updated our cost of doing business.
JON SCHIPPERS, TIMESTAMP: 00:07:25
There were several matters affecting this project, which included the fact that a key position on the owners team was vacated, and it took an extremely long time to fill. The other was that the museum had expected funding from New York City, which did not materialize as planned, and they did not have an immediate Plan B. I think the lesson learned is that we can actually prioritize issues that cause the greatest risk to a project. We need to consider this and plan for alternatives – basically have a plan B. I know that when we’ve done this in the past, we’ve found much greater success.
VICTORIA CABANOS, TIMESTAMP: 00:12:27
Our sales team at the time was very incentivized by just closing deals however they could with clients. We’re coming out of a pretty dismal year so we were very eager to get whatever business we could. And so they vastly under quoted this project. When it came time for us to actually make it we wondered: how are we going to make this given the price that we charged for it? So, the failure was that the sales team did not consult the people who had to make the object, they just wanted to close the deal. And so we ended up taking a pretty big whack on this project, the just building the molds for these pieces took about two weeks. We have two guys in molds right now – all they do is build shells in which we poor or hand-pack concrete. And so they were also taken out of the production line for about two weeks.
SPECIALTY FABRICATOR, TIMESTAMP: 00:14:15
Four years back I designed and built my own home for my family, and I was scared. Our budget was of course tight, and our time parameters and I was scared. I came in three weeks early, seven grand under budget and we took the money and went on a trip with the whole family afterwards. I was just delighted and had no idea what happened! I was my own client, my own contractor, my own designer. And somehow I made it work even though I thought I’d be the last person who I could wrangle into place. Somehow it worked out and I’m now I’m trying to sort of learn from that!
DESIGNER + BUILDER, TIMESTAMP, 00:17:30
If owners don’t know what’s going on, they find out at the end. If they know what’s going on, especially if they think there may be a cost associated with delays, they often get involved in a way that provides a lot more accountability for the entire team of collaborators.
GC, TIMESTAMP, 00:23:00
I think letting marketing agencies run the direction for your brand (and I used to work in a marketing agency) I think is really not the way to go. You own your brand, you’re working on a day to day, so you should lead that.
DESIGN MANUFACTURER, TIMESTAMP 00:31:50
I think if the schedule is unrealistic, you’ve either got to bow out, or you’ve got to be even more clear. I mean, I was waving my arms, but I probably should have just said, if this is going to be the case, let’s terminate. It was a great project, so that would have been hard. But you can’t put CA into a project for 12 or 18 months, and not get paid.
ARCHITECT, TIMESTAMP 00:35:20
We had a team that was two years behind schedule, so they we’re already discouraged. We got the owner to speak to the team and say: “This is a real priority for me – I need to get this done” to get buy in from the team. And you can’t task the team to figure it out: you have to give them the plan. Here’s how we’re going to do it. Here’s how we’re going to sequence it… to lay out a complete strategy on how you’re going to accomplish it.
SMART BUILDING CONSULTANT, TIMESTAMP, 00:39:10
I did a project on Park Avenue, a 15 storey building that turned into a 17 story building, on cinder slabs where the owner did not want to spend what we asked them to do, about $75,000 worth of probes. They said no, we’re only going to do 20 probes. That extra $55,000 turned into four and a half million dollars of change orders due to not finding corrosion in exactly areas we wanted to look, because the conditions were not what we had guessed they were.
STRUCTURAL ENGINEER, TIMESTAMP, 00:44:20
I have always struggled with getting my scope of work to be delivered on time. Usually, when I’m working with a business, they are taking time out of the professional service delivery part of their job to work with me on the business. Distractions pop up all the time and meetings get cancelled. And for me, that is a very difficult problem, because essentially, I sell my time. And if I have booked a meeting, and someone cancelled it literally five minutes before that is lost time and I, you know, budget a certain amount of client work every quarter, and if I don’t deliver it, then it’s lost. And that’s a very personal income hit. In fact, just last week, there were four meetings cancelled, and it’s difficult to say to people, I am going to charge you for this missed meeting, because it just tends to foull the relationship. 18 months ago, there was a client in particular, who kept canceling meetings and postponing scope delivery to the point where it was really causing me a great deal of difficulty, and I subsequently addressed this by creating a new clause in my contract language. What I’ve done is to declare that the scope is valid for a particular period of time. So typically, if it’s a four month scope, it’s to be delivered in six months of time. And anything beyond that six months triggers additional fees, not only a fee to restart the work, but also a premium applied on top of the original price to deliver the remainder of the scope.
CONSULTANT, TIMESTAMP: 00:48:53
