One Good Way To Save A Project

5/18/2014

About the time I was getting out of college, John Portman, an Atlanta architect, was designing the first Hyatt Hotel with an atrium lobby, pictured above. Unlike most architects, Portman was deeply involved in the development of his projects, not just the design. I was fascinated. And when I came across an article describing all the costs that went into one of his projects, I typed it up. Yep, this was the pre-electronic (caveman) era and electric typewriters were all the rage. Photocopiers were the size of a VW bus and the entire country shared three of them, one per time zone.

The list was really an eye-opener. I had never imagined there were so many things outside of design and construction that went into a project. The construction cost was just one simple line item, and the article explained that construction cost rarely exceeded 2/3 of the total cost. Even though these projects were major commercial undertakings - hotels, merchandise mart, office high-rises - there were many similarities to the schools that I was working on. We didn't consider hardly any of the items in the list, but the Owner had to. Here is the list I typed up.

Years later, when I had been on my own for about eight years, we were charged by county government to design a seniors center that was being funded mainly by a grant. Nearly every meeting included a sermon on how important it was to keep within the budget because the county simply didn't have any more money. So I dug out John Portman's list, made it relevant to this project, and got serious about finding out how much all this stuff cost. The effort paid off, and that was the first of a dozen projects that we did for the county - all of them with very tight budgets.

I can't open those files any more, but the master budget template that evolved over the years is very similar. This is a PDF of the template you can use to make your own template. The Excel version is accessible when you Sign Up for access to files in native format.

I like to put a budget like this in front of a client as soon as possible. It is always more than they thought their project would cost because their contractor friends have told them what to expect that the construction will cost. That's their focus - construction cost, which is the big number but it isn't the whole number. By showing the cost for the whole project, I also get to show the design cost in perspective. That is very helpful. Once the client sees this project cost, I know he/she will have to deal with the REAL cost. If the project still goes ahead, there won't be any problem with getting paid. I would rather get that resolved while our cost is small compared to what it eventually will be.

You also avoid some awkwardness as the client begins to realize that he/she will need a lot more money to finish the project or cut back on the scope to afford the real cost. These minor changes can be ticklish to get paid for.

Another advantage is that we look like we know more than the 'contractor friend' who only knows about part of the project development process.

So I am thanking John Portman for showing me the way to provide better cost estimating and thereby keeping me in good stead with many clients who appreciated the extra attention to detail when their money was involved.