Maximizing Value: Three Ways to Achieve Cost Certainty in Suburban Construction Projects

Published: June 2023

Investing in public infrastructure is essential for creating vibrant communities, which is why Illinois suburban municipalities and units of local government continue investing in their schools, parks, municipal buildings, senior living centers and other vital resources. But as the national economy continues to deal with high inflation and lingering supply chain pressures, maximizing the value of construction budgets has become more critical than ever. These conditions have made cost certainty the top priority when vetting potential contractors.  

F.H. Paschen has decades of experience in suburban construction and renovation, tackling diverse projects for communities of all sizes across Illinois. Whether our client’s budget is $5,000 or $50 million, we focus on helping them get the job done right so they get the best value for their money.  

Based on that history and our knowledge of today’s market conditions, we see three crucial trends to help municipalities gain greater confidence in their project costs.

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It’s always better to opt for a contractor with a history of similar projects under their belt, but experience has become essential in this economic climate.  

An experienced contractor can draw on years of historical pricing data and first-hand experience with different materials to provide more accurate bidding. And if unexpected supply chain disruptions or material shortages complicate matters later, experienced contractors can suggest alternatives that help keep projects on time and on budget.  

That’s exactly how F.H. Paschen recently kept one of their projects on schedule. The design for a four-story building originally called for precast concrete construction. But as the construction manager, we knew that precast shortages in 2022 would have delayed the project by several months. So instead, we worked with the project architect to alter the design to use masonry and steel rather than precast, helping the developer and the community keep the project on schedule.

Experienced contractors also have relationships with more subcontractors—increasing the chance of getting competitive bids from a pool of known and vetted companies. Those relationships also mean contractors can pivot rapidly to accommodate community and stakeholder needs. 

Contractors with a history of building subcontractor relationships are also more likely to have experience integrating local companies into their projects. The opportunity to support local businesses is a priority for many communities, and experienced contractors know this.  

As market conditions change rapidly, municipalities can maximize value by pivoting to alternative construction delivery methods that ensure cost certainty and minimize delays.  

The traditional low-bid method typically involves requesting design proposals, selecting a design team, developing drawings, and seeking contractor bids. However, in a volatile market, this process is subject to long lead times and the potential for expensive change orders during construction.  

Alternative construction delivery methods such as Design-Build and Construction Manager at Risk can streamline projects from start to finish—identifying long lead items and mitigating risk before construction begins. For example, Design-Build involves contracting with one company to provide design and construction. This close partnership between the designer, contractor and project owner can lead to more accurate cost estimates, fewer change orders, and faster completion times.  

In the Construction Manager at Risk model, a contractor provides a guaranteed maximum price and completion date, taking on all the financial risk. And because the contractor manages all subcontractor relationships, they can break out the project in phases—collecting bids and fast-tracking certain elements. 

With any construction delivery model, advances in project management technology can also help keep projects on time and within budget. For example, F.H. Paschen’s Virtual Design and Construction Group uses Building Information Modeling to create 3D digital models of buildings that help identify potential issues before construction starts. We also rely on cloud-based document management systems to streamline paperwork and communication between project owners and contractors. Adding to this toolbox, F.H. Paschen has also developed the Site Specs communication and photo-sharing platform to track construction activity. This system offers up-to-the-minute reporting on changes in scope or site conditions, helping municipalities keep track of costs and streamlining communications throughout the project timeline.  

Although new construction is exciting for a community, enhancing existing facilities through renovations and upgrades can provide similar benefits at more reasonable budgets. In fact, many units of local governments find it easier to win taxpayer approval for these smaller projects.  

We’re seeing this trend in suburban municipalities, where renovation projects are helping keep facilities up to date when new construction isn’t feasible.  Selecting a contractor that specializes in these projects is especially important, as contractors must have the experience to work within operational facilities, like fire stations and classrooms while minimizing disruptions for staff and residents. 

F.H. Paschen has worked with countless school districts on upgrades like developing classroom innovation centers, adding more collaborative student spaces, and creating secure entryways.  

Pursuing multiple new construction and renovation projects is also an opportunity to explore another alternative delivery method, such as Job Order Contracting (JOC)/Indefinite Delivery Indefinite Quantity Contract (IDIQ) under a Cooperative Purchasing agreement. Under this procurement method, any unit of local government can utilize the competitively bid cooperative contract for construction services, eliminating the need to bid on each project. Municipalities with limited resources and constrained timelines can streamline the construction process, allowing them to maximize their resources. 

With budget dollars at a premium, municipalities can emphasize cost certainty in their construction planning process. We believe that finding the right construction partner with a broad range of experience, the know-how to pivot when needed, and multiple approaches to meet specific project needs can help communities build and maintain the facilities they need to thrive, regardless of market conditions.  

We’re seeing this trend in suburban municipalities, where renovation projects are helping keep facilities up to date when new construction isn’t feasible. Selecting a contractor that specializes in these projects is especially important, as contractors must have the experience to work with the school to keep facilities operational and minimize disruptions for students and staff. F.H. Paschen has worked with countless school districts on upgrades like developing classroom innovation centers, adding more collaborative student spaces, and creating secure entryways.