1. Assembling a Project Budget
January 26, 2017
IMPORTANT NOTICE: This document contains confidential information proprietary to Gilbane Building Company, including but not limited to trade secrets and/or copyrighted material. Any unauthorized disclosure, duplication, or use – in whole or in part – of such confidential information for any purpose is strictly prohibited. All rights reserved by Gilbane Building Company.

2. Learning Objectives Conceptual Budgeting Methods
Evaluate various methodologies for conceptual estimating
Understand the procedures required to establish realistic and achievable project budget at the initial programming stage of design
Escalate and regionalize historical data to suit a particular time and place
Review the accuracy of ‘soft costs’ such as furniture and technology

3. Outline Conceptual Budgeting Methods
Review of traditional methods of creating conceptual budgets and soft costs
Common issues with these approaches
Solutions for issues and optimal conceptual budgeting process

4. Information may be limited to:
Introduction
Conceptual Budgeting is usually done when available information is very limited.
Information may be limited to:
An idea of the square footage
A space program
Number of units, such as the number of beds in a residence hall
An existing building needs renovation

5. Number of Common Units x Cost per Unit
Ways to Create Conceptual Construction Budgets
Number of Common Units x Cost per Unit
Examples:
Area: square footage x $ / SF of building
School: # of students x $ / student
Science Building: # of labs x $ / lab
Residence Hall or Hotel: # of beds x $ / bed
Cafeteria or Theater: # of seats x $ / seat
Site Development: # of acres x $ / acre
Road Development: length of road x $ / linear feet
Power: # of kilowatts x $ / KW

6. Using data from previous projects
Ways to Create Conceptual Construction Budgets
Using data from previous projects
“The last one we did cost this much…”
“My peer built one and it cost $ xxx per SF, and I want what he got so my cost should be the same”

7. Premiums added to projects at a conceptual level for:
Ways to Create Conceptual Construction Budgets
Premiums added to projects at a conceptual level for:
LEED or sustainable design – premium added as a % of total
Environmental issues in the building (hazardous materials)
Site development costs related to peculiar circumstances:
Rock
Water
Unsuitable soils
Grade variances
Level of accuracy of this can vary widely

8. Percentage of Construction
Ways to Develop Conceptual Soft Costs
Percentage of Construction
A/E Fees
Consultant Fees
Permits (or other various methods)
Contingencies
Escalation
Other?

9. Cost per square footage or per common unit
Ways to Develop Conceptual Soft Costs
Cost per square footage or per common unit
Furniture, Fixtures and Equipment (FF&E): per student or SF
Science Building: per lab
Residence Hall/Hotel: per bed
Cafeteria or Theater: per seat
Technology: per student (user) or per SF
Other?

10. Simple Lump Sums Ways to Develop Conceptual Soft Costs
Specific systems or equipment
Medical equipment
Power sub station
Septic system or sewer connection
Geothermal wells
Other?

11. Escalation not always applied correctly
Problems with Traditional Approaches
Escalation not always applied correctly
Adjust cost for inflation of a slump in the economy
Job location costs vary greatly
Boston vs. Columbus – 15% at least
SF costs to not account for program variances
Example: One school had a large technical education component, the other had more performing art spaces

12. SF/unit costs do not address differing building configurations
Problems with Traditional Approaches
SF/unit costs do not address differing building configurations
Tall and skinny vs. short and wide
More windows, less windows
A building in the South vs. Wisconsin

13. SF costs to do not address the differences in every site
Problems with Traditional Approaches
SF costs to do not address the differences in every site
Urban sites
Brown fields
Demolition of existing?
Utility availability
Roads, fields, wetlands

14. Often not escalated properly Items missed:
Problems with Calculating Soft Costs
Often not escalated properly
Items missed:
Specialty Consultants not in A/E base services
Peculiar local fees
Moving buildings
Utility service charges
Other?

15. What varies between buildings of a certain type?
Project Variables
What varies between buildings of a certain type?
Program
Footprint/configuration
Exterior skin
Structure
Site conditions

16. Use historical data for the programmatic pieces of the buildings
Solutions to the Program Variable
Use historical data for the programmatic
pieces of the buildings
How much does a recovery room cost?
How much does a music room cost?
How much does a typical dorm room cost?
How much does a toilet/shower room cost?
How much does a tiered classroom cost?

17. Make thoughtful decisions about the site
Solutions to the Site Condition Variable
Make thoughtful decisions about the site
Size (acreage)
Roads, parking, etc.
Utilities
Soils
Building demolition
Price in a conceptual way based on the local market

18. Solutions to the Soft Cost Variable
Develop checklists of all potential soft costs
Apply appropriate costs based on local market and the specifics known

19. Questions?
IMPORTANT NOTICE: This document contains confidential information proprietary to Gilbane Building Company, including but not limited to trade secrets and/or copyrighted material. Any unauthorized disclosure, duplication, or use – in whole or in part – of such confidential information for any purpose is strictly prohibited. All rights reserved by Gilbane Building Company.