On a recent blog one of the responders to my blog thought I was picking on architects too much and not enough on contractors. Actually I was pointing out a common practice by them, and engineers, that increases costs to their clients while shirking their own responsibilities.
Architects and engineers have the second largest impact upon projects costs. Their ability to determine the right materials and components to meet the client needs is paramount to have a cost effective design.
Regardless of the fee amount, the designers are being paid to design the project. I believe being paid for design services then farming it out to suppliers and vendors to do the design for free is at best unethical. When they don’t know enough to develop the design details and go out to the suppliers for it, it also lessens their value on the project. While there can be cases made for sole source suppliers and vendors, having a sole source vendor will drive the costs up. I have seen this on project after project for my entire career.
To be an equal opportunity blog and point out some practices by contractors that increase project costs, here are some pointers to watch out for.
- Contractors that cannot schedule and manage their work will cost the owner more money.
- Contractors than cannot evaluate the responsible low bidder at bid time will cost the owner time and money.
- The contractor that inflates costs on change orders and allows subcontractors the same opportunity will cost the owner more money.
- The contractor that shows a profit margin of 2% on cost plus work is hiding profit in other areas and defining it as cost.
By this count I am being unfair to contractors since I have pointed out four areas of contactor operations that increase costs on projects.
Oh By the Way… While an owner may be able to spot these problems, it is more difficult for them to spot a problem with the architects and engineers developing sole source specifications by using suppliers as “free” consultants to develop the specifications.
