Facilities managers are constantly under pressure to reduce the ever increasing
cost of building and maintaining their properties. Often times, it comes down to making difficult decisions over competing priorities and discerning the difference between needs and wants. “Should I scrape by with what I need today or try to justify to senior management why we should invest more now, in order to be able to more easily accommodate future growth?”

Many decisions come down to preparing and presenting a strong return on investment (ROI) case, but even then, the financial equation is highly subjective.

This article doesn’t attempt to help you make decisions on where you should cut corners versus where you should invest. Rather, it takes a look at the facility engineering design, construction and maintenance life-cycle from a high level and holistic view and focuses on key processes and methodologies of project delivery that can have a significant impact on reducing both short and long term costs.

1) Start Early

It sounds simple enough and maybe that is why it is commonly overlooked. Perhaps the single most fundamental aspect in controlling and minimizing cost is in starting every stage of the project, at the earliest possible moment. Planning is bringing the future into the present so that you can modify and make correction with little to no cost. The following graph represents the exponential impact on the cost of project changes over time. The point being that the earlier and more thorough you are able to address project requirements, the less costly your project will be. Therefore, delaying critical decisions will typically result in a significant impact on cost.

2) Engage With Specialty Consultants

“I don’t know how we’ll ever complete this project. After all – we still have a day job!” We’ve heard variations of that statement made on many large engagements we’ve undertaken. It seems that when planning a large project, senior management often overlooks the fact that the persons in the organization charged with “making it happen”, continue to have a demanding daily job that doesn’t let up, just because there’s a major project that requires a great deal of time.

Two things to consider: First, although a company may very well have in house expertise knowledgeable and experienced enough to tackle a major facilities renovation or construction project doesn’t necessarily mean they should do so without external assistance. Often times when we are engaged, it is as an extension of internal resources, rather than because no internal resources exist.

Secondly, when hiring an expert that specializes in a certain area – whether audio/visual, telecom, data center, critical power, etc., the fact that they do this for a living not only means that they possess in-depth experience on contemporary practices, but also that they are most likely in a position to save you money and ultimately “pay for themselves”, giving the end customer a “win-win” situation.

3) Implement Web Based Project Management

The web has become an absolute necessity when it comes to project collaboration. Keeping everyone on the same page – although an admittedly difficult task - has never been easier or more cost effective with the advent of online program and project management tools. There are a plethora of tools available, including no cost open source project management and the very easy to use award winning Basecamp. Collaboration between team members is critical not only to the ultimate success of a project, but also in reducing the costs associated with poor communication.

4) Exploit The Competitive Bid Process

Nothing lowers price like healthy competition. Like any other aspect of a project, there are “best practices” – and…let’s just say, not so desirable practices. Executed correctly, with detailed engineering and design drawings and specifications, a vendor neutral approach, and a level playing field with the right bidders, the competitive bid process can garner very significant savings.

5) Develop Detailed Specifications

It’s important not to skimp in the programming and design stages of a project for the very reason that this essentially serves as the foundation for everything else. If the design is the weakest link, it will have an adverse impact on the entire project. Conversely – take the necessary time and make the necessary investment during this stage of the project and you are sure to reap substantial rewards through better execution and lower cost.

6) Require a Detailed Schedule of Values

One of the greatest concerns of many facilities managers is that the contractor they select today will spend the duration of the project looking for ways to “nickel and dime them to death” on change orders. Unfortunately, this is often a reality. There are three sure fire ways to ensure this doesn’t occur. First – as already stated – prepare detailed drawings and specifications. Secondly – Engage the assistance of a specialty consultant to act as your liaison throughout the project, including the construction administration and commissioning phases. Finally – and perhaps just as importantly – require that the contractors bidding on your project provide a schedule of values for both material and labor, to be used in calculating the inevitable change orders that come on any significant project. This way you can not only ensure that a contractor isn’t “buying the project with the hopes of making profit on the back end”, but you will also be able to quantify the fairness of pricing on any changes that do occur during the project.

7) Plan for Future Growth

Growth is a great thing – unless you haven’t planned for it. Then, it can become a nightmare. When planning for your new facility project, it is wise to ensure that you plan for a certain percentage of growth – not only in square footage, but also in the systems necessary to support the growth. We’re not talking about additional hardware that can be easily installed, but rather the infrastructure that becomes part of the building and that can be installed at a much lower cost during the initial project, and without disruption to daily operations, as opposed to tearing up walls and ceilings after the fact. This can often mean placing cables that support any type of facilities infrastructure, such as voice, data, audio visual, etc, in the ceiling with strategically located areas, and with enough of a “service loop”, that they can easily be moved and dropped to reach a specific location where greater capacity is needed

8) Select the Lowest “Qualified” BidderThe term “lowest bidder” is a misnomer. While it may be tempting to select “the lowest bidder”, after receiving competitive bids, the fact is – this approach can and usually does, result in a great deal of heartburn down the road. Why? Often times, contractors will overlook a certain requirement of a project, or perhaps they may have misunderstood a requirement that results in a significantly under estimated project. You might say – “Well, that’s their problem, not ours”. In theory, you’re right; however as a matter of principle and practicality, if it becomes their problem, it also becomes yours. The fact is, when a contractor is under the gun and essentially losing money out of the gate, they go into panic mode. This includes placing lower paid and lower quality people on the project, looking for ways to cut corners to save cost and finding every way possible to increase change orders. One way or another – you’ll end up paying more in the long run.

Therefore, it is critical that all submitted bids are properly vetted, normalized and “qualified”. Only then will you be in a position to make an objective and smart decision, comparing apples to apples and selecting the “lowest qualified bidder”.

9) Minimize Vendors Whenever Possible

There’s an old saying “There is strength in numbers”. This is not always true, and it’s especially not true when it comes to how many companies are involved in a facilities renovation or construction project. On some occasions we have seen instances where four or five technology consultants and contractors, could have been quite easily been replaced with one or two. The result would have been better communication, lower construction and administration costs, etc. So, when planning your project, look for ways you can gain economies of scale. After all – you’re building a facility – not an army. In this case a better old saying might be “Too many cooks in the kitchen can spoil the broth”.

10) Require Detailed Documentation

The devil is in the details, and when it comes to managing and maintaining your facility “post implementation”, detailed documentation can be a life saver. At the very least, it can be a significant money saver as it provides a means for identifying and locating what has been installed and troubleshooting problem areas. We have all seen a multitude of variations on project documentation from simple spreadsheets and drawings to feature rich and costly “facilities management software systems”. Our recommendation? If it’s a smaller facility or if you don’t have a process for updating documentation as part of your maintenance process – choose the simplest and least costly route. Because either way – if the documentation isn’t maintained – it’s only a matter of time before it becomes useless.

Summary

We hope you’ve found these helpful hints useful as you consider your next facilities project. We’d love to hear your feedback and thoughts on what we’ve expressed here, as well as sharing your own insights. Drop us a comment and let us know.

About the Author

Sean Maguire is Director, Business Development for JanCom Technologies. JanCom is a leading provider of Technology Infrastructure Design & Engineering services with specialities in Telecom, Audio/Visual and Critical Power for data centers.