If You Didn't Win Mega Millions, Read This
Building a sports complex is EXPENSIVE! Let’s get this out of the way. Unless you recently won the Mega Millions jackpot the cost of a sports complex is probably important to you. There are many ways that you can save money while constructing the sports complex of your dreams.
You received your bond money and now you want to design a magnificent sports complex... Great! Where do you start? Who do you contact? How does your vision come to fruition? Typically, there are 3 delivery methods to creating your project:
1. Design Build
2. Design Bid Build
3. Construction Manager At Risk
Deciding on the proper delivery method should be your first step. Each of these methods comes with their own pros and cons. The method you select will very likely affect the final price of your complex. Read below to learn more.
1. Design Build
Design Build is a process in which one company takes complete responsibility for all design and construction services under a single contract. This full service begins from the initial design phase, to choosing the proper facilities, constructing your dream facility and maintaining the budget. A Design Build project is the best way to receive the most for your valuable dollars. Under a Design Build project, you do not have to continuously pay additional and unforeseen fees for services. Dollars that would have normally been allocated to a service fee under other methods, is reinvested into the project in a Design Build. Choosing the Design Build method can save your project up to 14% in fees. This process includes a Guaranteed Maximum Price (GMP). GMP is a limit on the amount that the owner will have to pay the contractor on the project, regardless of the actual cost of the project to the contractor.
Of course, you can’t avoid all fees. Every construction project has what the industry calls “soft costs.” Soft costs are the expense items that are not considered direct construction costs. These include things such as financing and legal fees, permits, taxes, security and LEED certification. While unavoidable, these soft costs are typically 2% of the total budget.
The Design Build method provides the quickest delivery for your project, including the possibility to fast track the project. One vertically integrated company, handling all phases of a project, from the manufacturing of the product, to the construction of the facilities, ensuring minimal to no delays. A single point of contact for the client provides real time feedback and prompt responses to any inquiries. While construction cost may seem more initially the benefits of a Design Build type project are endless.
2. Design Bid
A Design Bid Project, on the other hand, awards the contract to the lowest bidder. Contractors bid on the project, with an understanding of the required specifications. The savings from a Design Bid method are apparent up front by choosing the most cost-effective materials. Several entities are involved in the decision-making process, including, but definitely not limited to, a consultant, an engineer, and an architect. The schedule and construction are dependent on all parties agreeing on the same direction at the same time. This process can be cumbersome while requiring a lot of time and energy.
Initiating the Design Bid process requires the hiring of a consultant to guide you through the process. A consultant’s primary focus is to assist in predevelopment planning, design management and construction management. Typical consultant fees are between 1-2% of the total project. Many consultants also provide additional services like facilities assessments for an additional fee.
The consultant will also need to hire an architect and engineer for your project. Consultants often scour the nation to find the correct architectural and engineering firm who can get the quality project you deserve for the price you have allotted. Many consultants have preferred architects and engineers they rely on, based on the scope of the project. Standard architectural or engineering firm fees are 5-6% of your overall project.
The biggest pro in a Design Bid project is the ability to receive the most economical materials for delivery. While you will likely receive pricing that looks great on paper, you will not necessarily receive the greatest value in your finished product. Many contractors installing Design Bid jobs do not provide their top crews to install the project, this is a popular cost saving avenue. Saving money initially is great if the job is flawless but it may require additional unanticipated maintenance costs which will diminish that cost savings over time. Failure of the design team to be current with construction costs, and any potential cost increases during the design phase can cause significant project delays, especially if the construction documents must be redone to reduce costs. Also, as contractors are introduced later in the process so there is little opportunity for experts on the ground to offer potential value options or more efficient alternatives for the project.
So, while a Design Bid project may offer an attractive price up front and could be the lowest overall cost, there are many drawbacks and unforeseen costs in the long run.
3. Construction Manager At Risk (CMAR)
Construction Manager at Risk is where you select both an architect/engineer and a consultant for the project. All parties then agree upon construction manager (CMAR) based on quality and price. The CMAR is required to act in the owner's best interest. Generally, the CMAR is financially liable for any costs exceeding the GMP. In addition to the 6-8% of fees paid to the consultant and architect the client also must now pay a fee to the CMAR. These fees typically range from 4-6%. CMAR are beneficial when the project involves multiple trades. If you are constructing a new recreational center along with a sport complex a CMAR is a viable option. Potentially serving as a liaison between the Architect-Engineer and onsite Construction Manager, a CMAR can increase participation between all parties.
CMAR necessitates the negotiation of two separate contracts which can be cumbersome. Requires cooperation of the Architect to work out the detail of design before and during construction. Design plans are not always complete at each at later stages of the process. If a detail is overlooked construction costs may run over if mistake is not recognized early. The owner may be financially liable for exclusions and inconsistencies in the contract documents.
Hellas Construction is the only sports construction company that can provide the Design Build delivery method, while manufacturing all the products needed for your construction project. From fiber, textiles, and polymers for turf, track and court surfaces, Hellas is your single source supplier. The in-house design team will apply their expertise to create a facility that exceeds all expectations. You will receive true to scale renderings of the project that illustrate both design and scope. Once approved, Hellas will construct your facility with its own equipment and crews of Hellas employees (not contractors). The single supply chain offered by Hellas allows for precise quality control and timely delivery to your project. Reinvest the 14% you would be spending on consulting fees by contacting Hellas for your complete sports facilities needs.
Corey Downing is a marketing specialist for Hellas Construction. Reach him at firstname.lastname@example.org.