Program Verification

Wednesday, 06 January 2016 / Published in CCS News, Industry News

Nuckolls Jim SmallUshering a facility construction project from concept through successful completion requires facility owners to navigate an intricate maze of decisions: determining building design, locating an appropriate site, deploying necessary personnel, identifying materials to be used, etc. In most cases, facility owners begin planning a facility well in advance of acquiring funding. Before funding can be secured, however, owners must determine how much money will be required to complete the project. Establishing an accurate budget early in the process is of paramount importance because the budget affects nearly every other decision that will be made before the facility is finalized. However, ascertaining accurate costs can be challenging; time can elapse between the moment the facility is conceptualized until funding is obtained, rendering the initial estimates outdated, inaccurate, or unrealistic and negatively impacting the project from the very beginning.

Program verification, a process that uses Parametric Cost Model™* to continually predict current and future costs as the facility progresses, can help owners set a realistic and, more importantly, real-time Construction Cost Limitation (CCL), the maximum amount that will be paid for a construction project as contracted between the owner and architect. When conducted at the outset of project definition, a program verification can help ensure that the project remains within the CCL with few or no necessary adjustments to project scope.

The optimal time to conduct a program verification is prior to establishing the CCL in order to isolate costs within any given program task. Parametric Cost Model™, a real-time proprietary estimating software procedure and an essential component of program verification, allows owners to incorporate current market pricing into the estimate. Once program information is input into the software, any particular space within the facility can be isolated to make changes to finishes or other items, and the change is immediately reflected in the CCL’s particular space and aggregate amounts. For example, if plans originally specified floors to have terrazzo tile, and the owner elects to change to carpet, the software instantly computes the cost reduction in both that particular space and the overall budget.

Because of the real-time nature of this procedure and the fact that pricing is kept current by obtaining commodity market prices on a project-by-project basis, accurate costs of escalation based on time-line projections of the market as it currently exists can be included in the CCL. In addition, labor issues, increased material pricing, and project logistics (location, site issues, etc.) are considered and incorporated into the estimate. By utilizing Parametric Cost Model™, owners can also make certain that building site issues, including laydown, staging, proximity to adjacent buildings, crane and scaffolding locations, etc., can be determined early in the process and any subsequent cost-related issues addressed while developing the CCL.

After all issues are identified and accommodated, the CCL is presented to the owner’s architect/design team as an accurate portrayal of the project with a realistic cost. Project design can then proceed and construction can commence, on time, within the CCL budget, and with little or no necessary adjustment in program or scope.

For more information on how to conduct a program verification, contact Jim Nuckolls, C.P.E., Senior Cost Manager for CCS International, Inc. (CCS) at 832.288.4762.

*Parametric Cost Model™ was developed and is owned by CCS International, Inc.

CCS International, Inc.’s (CCS) dedicated team of in-house estimators and cost managers; architects; civil, structural, and MEP engineers; and energy analysts can draw from 35 years of accumulated data/industry experience in all market sectors and more than 5,000 projects to conduct a successful program verification utilizing CCS’s proprietary Parametric Cost Model™ and assist you in developing an accurate budget, one that will remain realistic through construction completion.