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CONSTRUCTION KNOWLEDGE BLOG

December 7, 2011

Opportunities in Bench-Marking
Filed under: Quality Control — Tags: — nedpelger

When I was a young foreman on a construction site, an old guy (younger than my age now) taught me how to do construction layout with an optic level. The first thing he explained was about bench-marks. To measure the relative elevation of different objects (I was laying out curbs…badly), I needed to be able to measure the height of my instrument off a known elevation, a bench-mark.

As I just completed the judging for the Engineering News Record Best Projects of 2011, I’ve been thinking about bench-marks. The most challenging aspect of judging the projects came from the inconsistency of the data presented. In our tele-conference yesterday, the other judges agreed.

Safety should be one of the easiest categories to bench-mark. Many years ago, OSHA tried to resolve that problem by requiring construction firms to measure their Experience Modifier (1.o being the average), their Lost Time Accident Rate and their Recordable Incident Rate. These measures should provide objective data to rate a firm’s safety effectiveness. Yet we’d see huge projects with Recordable Incident Rates of zero, that simply seemed impossible. To work millions of man-hours and not have any splinters in the fingers or strained muscles seems quite unlikely. It appears the numbers are being gamed or mis-reported somehow.

In another area, I’ve often noticed the lack of standards in measuring the costs of building projects. Some projects include everything from land to process equipment, while others only list the vertical building construction costs. I’m amazed how many times smart people don’t ask what is included in the stated costs. (Note to self: if you want to look smarter, make it a habit of asking what’s included and not included in prices when they are offered…learn to think critically about what any stated construction cost includes).

I’m a proponent of listing building project costs with the following simple break-outs:

  1. Land costs, including settlements and right-of-wayss
  2. Design fees, including estimating costs
  3. Sitework costs, everything outside the footprint of the building
  4. Building costs, footing excavation and all other vertical construction
  5. Equipment costs, including process equipment, appliances, furniture, fixtures, etc.
  6. Soft costs, including permits, tap-in fees, other utility fees, etc

I also like to always look at those costs as both a sf cost and a percentage of total project cost. These measures start helping you see trends, that help you understand the business better.

If you learn to present your projects in a clearer way, you’ll lose fewer projects to yahoos that confuse owners with scammy pricing. Remember, part of your job in selling a project is to educate the owner on the value you provide.

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