In a recent study featured in a 2008 Hospital Building Report, 57 percent of respondents said their completed construction projects managed to meet or come in under their budget and schedule goals. To Ian Parr, that figure is astounding.
“That would be abject failure to us,” he said. “We wouldn’t even begin to know what that would mean.”
Parr is Founder and President of Construction Cost Systems, Inc. (CCS) and Owner Services Group, Inc. (OS), which are consulting firms specializing in owner representation, project management, cost management, and cost estimating. For him, bringing projects in on time and at budget is the norm.
“We started (CCS) in 1979,” he said, “and early on, we were used mostly by architects. But then we started moving into other areas that affect the owners and their costs. There would be change orders during construction, and claims, and problems trying to resolve issues between contractors and owners. Everybody had a differing opinion of cost, and they were looking for someone to be objective and resolve this issue before they went off and got their lawyers. So that put us more and more in contact with owners.” But he added, “There’s obviously more to representing owners than just cost.”
To make sure he was going in the right direction, Parr contacted the entrepreneurship program at Northern Illinois University, “and asked them to take us on as a project. They did, and we worked with them to re-plan the company and focus on the owner’s representative side of our business. That was a two- or three-year process, and that’s where we are today.
“We’re an organization with two branches one is the cost-management branch, which does business under the banner of Construction Cost Systems, and the other is the Owner Services Group, which provides full owner representation with everything that means to owners who are developing construction projects in health care and other targeted industries.”
But where does the company get its knowledge to impart to clients? It starts with Parr’s 40 years of experience and the thousands of health care projects he and his colleagues at the firm have worked on. In addition, Parr said the first thing they do when starting a new project is what he calls project definition. “To us that is a process,” he said. “We know the steps a client should be going through to complete that process, and we know the deliverables and the directions that should come out of that process.
“As an owner’s representative, producing a construction cost estimate is just part of the fiscal information we provide. We also have to make sure that a budget is developed for all of the other things that go into a project, from furnishings to professional service fees to legal fees.”
He gave an example of a hospital that wanted to build new bed space. The budget was prepared and included the design fees, information technology, etc. However, what was overlooked was that in building the new space, one of the main parking lots was removed. So to service their patients, the hospital had to put in valet parking. But the budget didn’t include the thousands of dollars needed to cover a two-man, two-shift operation.
The company helps clients avoid situations like that.
“Our approach to project definition is to bring the best qualified people around the table to identify what these issues are,” Parr said. “One of the strengths is asking as many questions as you can. The problem is not putting a budget together based on the issues; the problem is identifying the issues. If you don’t know it’s there, you can’t budget it.”
If a client wants to build a 200,000 sq. ft. high-tech office; if he wants to build it in three years; if he wants to spend $400 per sq. ft; and if he wants to build it on poor soil, a lot of issues have to be addressed. For example, if there is poor soil, you spend the time to look at foundation options and confirm that one fits within the budget. If there are multiple solutions that require further research, you must evaluate the range of costs and develop a risk-management strategy. “If you do this for all issues, you have a project that makes sense,” Parr said. “You’ve done the research, defined the risk, and developed a realistic budget. That’s a well-done, well-defined project.”
He added that anyone brought into the team now knows the parameters. “As process managers, we have to make sure everybody who comes into the project clearly understands the goals and can buy into them. If (the project) is 200,000 sq. ft. and it’s brick, don’t come in with a project that’s 300,000 sq. ft. and limestone. Our job is to make sure people follow the process and stay with the goals.”
Parr continued, “We want to be able to say to clients at the end of a project definition, this is a doable project, we’ve got a great team, we’ve got the budget set up, we know where our risk lies we believe that this project is going to come in on budget, on schedule, and it’s going to be the quality and functionality you’re looking for.
“So success of the project becomes a predictable end result, which is what clients are looking for.”
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