Designing with Cost in Mind

Oct 9, 2019 | Cost Controls, News, SJCC

Executive Summary.  Contractors are often brought into a project in the design phase to minimize cost.  Here are some guidelines on infrastructure project cost cutting measures from a Contractor’s viewpoint – it’s advice to a design team.

How estimating is done.  In civil infrastructure work, most contractors use crew-based methods for estimating.  This means that each and every activity on the job is built by a crew performing their work at a certain production rate.  For example, a pipe crew installs X lineal feet a day.  A rebar crew installs Y number of tons per shift (also known as a day).  And lastly, a bridge beam erection crew sets a beam in Z hours.  This varies significantly from unit price estimating wherein a book full of average unit prices is opened and applied to takeoff quantities.

Components of cost in a bid.  A bid has very few cost components:  labor, equipment, subcontractor, material, and let’s say, other.  That’s it.  Five (5) types of cost.  Yes, there’s escalation, tax, labor fringes, overhead, insurance, bond, freight, and certain regional specialty costs like ghost riders.  Anyway, if an owner or designer can think in these basic terms, the cost can be minimized.  The following chart provides some thinking points for an owner and his/her engineer.

My story.  I’ve been brought in numerous time to help a designer improve a design.  And frankly, one of my favorite parts of the business is value engineering.  There’s a lot designers can learn from contractors.  The biggest benefit and owner can get from their designer is their ability to listen to the contractor or their firsthand experience in the field of seeing the work.

View the grid below as a PDF or click to enlarge.


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