Cost vs. Value in a Design-Build Remodel
“What’s this going to cost?”
This is one of the very first questions clients ask as they begin planning their home remodel. No matter how small or large the budget, “getting what we’re paying for” is a core consideration for anyone embarking on a remodeling or new home project. In design–build, “getting the biggest bang for the buck” is the primary goal. What is equally important, however, is the value gained by the long-term return on the client’s investment.
This value can be attained by the use of value engineering, which uses conceptual design techniques, budgeting, and creative methods to achieve the client’s design goals within the budget constraints. With design–build value engineering, the design-to-budget process allocates more funds toward the client’s top priorities, while items that clients are willing to compromise on are given less money. In this manner, the budget fulfills the client’s desires and delivers the highest quality results obtainable within the budget.
The Difference Between Traditional Bids and Design-Build Fixed Price
With the traditional design-bid-build process, a contractor submits an estimate of costs to the client. He may be bidding for the project against two or three other contractors. To submit an estimate with a competitive price, he may decide to cut costs so his bid is awarded the contract. Cost-cutting measures might include using lower-paid, less-experienced labor or sub-contractors, or selecting lesser-quality or inferior building materials and fixtures. The short-term “savings” gained by this manner of cost-cutting often create problems during the construction phase or after the project is completed. When these problems occur, fixing them often costs much more than it would have cost to invest in quality materials and professional workmanship from the start. Value engineering helps prevent unnecessary complications in the later phases of the project.
In the design-build process, the highest value for the budget is achieved through thoughtful design concepts, the wise choice of materials, and the application of efficient methods. The design-build firm applies value engineering from the very beginning of the design phase. This is the time, early in the process, for the client to work with the design-build firm to reassess priorities, adjust or compromise on selections, and decide where best to allocate budget for the highest value. Basically, value engineering requires a thorough understanding of client needs and desires in order to incorporate as many client priorities as possible into the scope of work while keeping within the budget.
How is Value Engineering Used in a Remodeling Project?
The structure, finish details, material selections and energy/efficiency issues are worked out while the design and plans are developed, well before construction starts. It is these design details and material selections that can make the greatest difference in project quality and costs. The design-build firm will begin looking for opportunities to reduce costs, using value engineering, by considering:
- various alternatives to the design,
- structural systems and finish materials, and
- selecting systems and finishes that are cost-effective and match the intent of the design and the desires of the client.
The designer, selection coordinator, and estimator work closely with the client to decide which components of design and materials can be adjusted to fit the budget but still achieve the desired results.
For example, a client may want a curbless shower with Universal Design features in the master bathroom, and may have also chosen an expensive marble tile for the bathroom floor and surrounds. The curbless shower design, as a structural feature that adds Universal Design benefits, adds more value to the project than an expensive marble tile would. By choosing a less expensive tile that achieves the same or similar aesthetic, the client can have both the value-added curbless shower and the beautiful tile. That is a simple example of how value engineering allocates budget to priority items without sacrificing quality or functionality. That is value vs. cost, a core concept of the design–build process.
Benefits of Value Engineering During A Project
Changes to the design and the plans made early in the process have minimal impact on the project costs. But if those same changes are not considered early on and instead are made during construction (after the plans have been completed and the permits have been issued), there are likely to be significant consequences affecting costs and schedule. When the contractor, engineer, architect, interior designer, and some of the sub-contractors contribute their expertise and experience during the design process, the best opportunity exists for a seamless, cost efficient project. A successful design process is one in which the project has been built and choreographed on paper and in the minds of the participants before construction starts.
Value Engineering Has Many Cost vs. Value Benefits for the Client
- The design–build team and client have a collaborative relationship in all aspects of the project.
- The contractor’s conceptual design and estimates occur very early in the process, giving the client an opportunity to understand the cost implications of any design decision they might make.
- Early definition of scope allows design/builder to establish accurate pricing.
- Realistic completion dates can be established and maintained.
- One entity is fully responsible and accountable throughout the life of the project.
- Overall project costs are minimized through the use of creative design, innovative methods, and cost-effective solutions.
The Long-Term Benefits of Cost vs. Value and Value Engineering
A design–build professional can best help you determine how value engineering and the design–build process can give you the beautiful home remodel project you envision for the amount of money you are willing and able to invest. For a guide that will help you prepare for your first meeting with a design–build firm, read the 2017 Cost vs. Value Report.
The guide is an outline of what you might realistically expect remodeling projects to cost in your area, and the value added to your home once the project is complete. Costs vary widely by geographical area and the real estate market. For these reasons, working with a design–build contractor with years of experience in your area is really the best way to become informed about how the best value can be achieved with creative design, innovative methods, and time-saving and cost-effective solutions.
More Resources To Help You Plan Your Remodel Project
You may have many more questions to ask yourself and your design/build firm as you begin planning your remodel or new home project:
- Take a Self-Assessment Survey to help you determine whether Design Build is a good process for your project. (The survey will email your answers to you so you have them when you meet with your design team.)
- Read through Frequently Asked Questions that are important to ask of your design–build firm.
- Read a step-by-step outline of the Design–Build Process.
- Have a question? Contact one of our design–build experts today!.
This is the fourth article in our LEFF Design Build series of blog posts:
Read post #1 here: “There is Something Bothering You About Your Home.”
Read post #2 here: “Remodeling? Questions to Ask Before You Start”
Read post #3 here: “Step-by-Step Through the Design Build Process”