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7 Things to Do for Structural Cost Control

The construction industry has been sweating as the pandemic wreaks uncertainty across labor and material costs. At one point the price of lumber was over 400% higher than a year before, causing many projects to re-evaluate their costs or risk stopping completely. Ground-up developers need to control costs more than ever to keep projects within budget. An experienced structural engineer can analyze any combination of construction materials and optimizing structural design can yield substantial savings if done right.

Your structural engineer could influence and control over 30% of the total construction budget. Yet, sometimes cost takes a back seat to an easier design, conservative judgment, tight schedules, or inexperience with cost. Some developers use peer review or value engineering, only to end up wasting time and money when the structural engineer argues against significant changes.

To do it right take all the following steps collectively.

1. How does Structural Cost Control work? A third-party structural engineer reviews the structural drawings, along with architectural drawings, to find ways of reducing cost while keeping design integrity and functionality. When it comes to savings, a savvy engineer will look for overall changes that can provide the highest impact on cost. Items such as overdesigned slab rebar, 2x12s being used for floor framing when 2x10s would also get the job done, and easy-to-miss notes that have huge cost impacts.

2. Have your third-party structural engineer focus on costs. Any peer reviewer can give you sheets full of red marks, so make sure they focus on comments that save money. Before you select a third-party engineer, make sure they know the costs. They should keep budgets of past projects for reference, or understand what designs are the most economical. Another way to verify cost accuracy is to solicit independent Document and Cost Review also referred to as Pre-Construction Document and Cost Analysis.

3. Your third-party engineer should be familiar with your market sector. A good structural engineer can reliably navigate challenges of different sectors, but your third-party engineer should specialize in that sector for optimal cost control.

4. Keep your structural engineer and your third-party engineer separated. The most common mistake is to have your third-party engineer give comments directly to your structural engineer. This usually results in arguments that waste time and makes everyone frustrated. Your structural engineer is disincentivized to accept comments from other engineers. Go around this by having your third-party engineer give comments directly to you. Then, you can pass on major comments as your own, giving them more weight for your structural engineer to consider.

5. Invest in your structural engineer. Your structural engineer may not make requested changes simply because it is not covered in their fee. It is not unreasonable for an engineer to ask for a change order to accommodate changes after they complete their design. A change that will save $200,000 in construction is worth paying $20,000 to your engineer.

6. Do not fall prey to alternative designs. Say you are constructing a concrete mixed-use structure, whether full-height or just a podium with a light-frame on top. Your structural engineer designs conventional reinforced concrete slabs. The first comment you might get from a third-party engineer is that post-tensioned (PT) concrete will save a significant volume of concrete. While true, this change would result in a complete redesign of the entire building. Your structural engineer decided against PT in the first place, so likely the only way a PT design goes through is to bring another engineer on board, costing valuable time and money. This would also affect architectural design since ceiling heights are changing. You want comments that don’t require big changes to design. In the above example, better comments might revolve around ways to reduce the volume of concrete or the weight of rebar without completely changing the design.

7. Use cost control to be sure your engineer is economical. Even if you do not like your structural engineer, the risk of trying someone new can be daunting. Cost control can help you quantify what your engineer is costing you. If your structural engineer is doing well on cost control, you can move forward with confidence in them. Or they might not be doing well and costing you millions of dollars. If the latter, the cost control process gives you an introduction to another engineer. All of this is worth the small extra cost of structural cost control.

Structural cost control is a major money-saving strategy in a development project. Using the strategies above will ensure an optimized structural design. An experienced third-party structural engineer will help you move forward with confidence as construction costs increase higher than ever.