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3 ways to avoid construction cost overruns

4 min read

When renovating a farm building or planning new construction, what are the best ways to reduce costs or limit cost overruns?

Brad Edwards

Saskatchewan Sales Division, Goodon Industries Ltd.

Know your costs

Like many companies, we prepare contracts which include material, labour and freight so there is no reason for a cost overrun on one of our buildings. If the customer decides to add an extra overhead door or extra length to their building after the fact, then of course the price would increase.

The customer should start with a budget to know what they want to spend and then get prices on the building, and any other components they may want such as concrete and electrical. Once a building is decided on, be sure what is ordered and try not to make a bunch of changes during the build.

If it becomes essential to make some changes, find out what they are going to cost, to avoid any surprises. It’s also important to have all the contractors involved communicating and working together as much as possible. Otherwise, there can be mix-ups which might add to the cost.

It’s also important to consider all aspects of the project from site preparation all the way to adding eavestroughs. Sometimes important elements are overlooked.

However, the most salient point is that experienced companies and contractors can give accurate estimates, which should align with their final invoice. With written contracts and all aspects on the project planned out, the buyer knows what the price will be upon completion.

Greg Hutchings

Manager, UFA Farm & Ranch Structures

Define wants and needs

A great first step is to define what a “want” is and what a “need” is. These are two items that should be considered when planning your project. Everyone has their own perception of what the result will look like. It’s at the initial design and planning stage of the project where you need to determine all expectations. It is important to not only think about immediate needs, but also the future. 

A lot of contractors can put a dollar value on a piece of paper. What is truly important is to educate yourself on what you need, so you're better able to successfully plan the project. Planning may cost you funds up front, but the process allows you to potentially save costs in the future. For example, having drawings completed before you go to quote stage will reduce the inaccuracies of competitive quoting. Plans provide guidelines to keep cost overruns in check. 

Other important considerations when planning your building project are site preparations, landscaping at the end, or required services to the building like electrical, water and gas.

A successful project starts with a plan and talking to the right people. In the end, this will contribute to a building that meets all your expectations.

Gary Van Bolderen

Board member, Canadian Farm Builders Association (CFBA) Owner, Dutch Masters Construction Services Ltd.

Do your homework

To prevent cost overruns:

  • Make a complete list of what you need. Consider excavation work, road entrance and driveway, septic bed, well, hydro service, backup generator, site survey, engineering, conservation authority approvals, and anything else you can think of. 

  • Design the building for your needs, detail every specification and prepare a final set of working drawings approved by the building department. This should include details about framing, foundations, insulation, type of concrete, interior finishes, drains, type of doors and windows, exterior cladding, cupboards, type of lighting and landscaping. Be very specific, even listing manufacturer model numbers where applicable.

  • Make a list of the trades and miscellaneous expenses you will need to complete the project: electrician, concrete installer, excavator, plumber, engineer, painter, building contractor, temporary waste bin rentals, portable washrooms for workers, project builders risk insurance, financing costs, etc.

  • Check with local agencies for compliance for building permit approvals.

  • Send out all the information to each trade to obtain prices based on the final specifications and engineer approved plans. Send the same details to everyone.

  • Once the prices are received, decide who you want to hire and add up all the different trades, suppliers, fees, materials, etc., to get your total project costs. This quoted amount shouldn't change, unless you change the specifications during the construction phase.

This is a lot of work and requires a lot of expertise and knowledge. For significant building projects it would be wise to hire a professional general contractor who will sit down with you to design the project, with your involvement in the process. 

Download our Construction Checklist to help make your project a success.

From an AgriSuccess article.

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