With expenditures of approximately $ 1.293 billion annually, the US construction sector is one of the largest in the world. As such, it’s highly lucrative and popular among investors. However, it does not come without risks. The secret to unlocking value in this sector is identifying risks and mitigating them, pro-actively, during the pre-construction phase.
In commercial construction, where the stakes are even higher, and projects can cost hundreds of millions of dollars, managing such risks is crucial. Acknowledging that there are risks is the first step towards achieving this, but it’s not sufficient. This is why construction companies, along with other stakeholders, conduct pre-construction meetings.
In this article, you will learn what pre-construction meetings are and what to expect at one, and the benefits they offer.
Purpose of Pre-Construction Meetings?
In essence, commercial projects consist of many projects and teams that work collaboratively and independently towards achieving set out goals. As such, there are many elements in place and many opportunities for bottlenecks to arise. When this happens, there’s a chance that the project can take longer to complete or possibly go over budget.
Despite what the name might suggest, pre-construction meetings are meetings that occur before or even after the commencement of a project. The goals of organizing such meetings include:
- Ensuring that project goals are communicated clearly before operations begin
- Determining the roles of each stakeholder
- Managing expectations
- Outlining mode of monitoring project goals
- Reviewing utilities available
- Setting quality controls
- Assessing site conditions and boundaries
- Developing a communications plan
Pre-construction meetings vary in format depending on the type and scope of the project. They allow each party involved in the construction process to have clear individual and collective goals. This is crucial as issues in one area of the project may significantly affect other areas. Although pre-construction meetings do not necessarily eliminate challenges during the construction phase, they significantly reduce their impact.
What Should You Expect at A Pre-Construction Meeting?
Anyone who’s been in the construction industry for some time knows all too well that the success of a project is determined long before it begins. Whereas some aspects of pre-construction meetings may seem unnecessary and redundant, they’re essential.
If the specifications and quality requirements are unclear when a project begins, issues are bound to arise. For a construction company, this means more money and time are needed to complete the project, hence increasing the likelihood of failure.
The number of pre-construction meetings held varies from one project to the next, depending on the duration of the precon phase and objectives. Some of the focus areas during the precon phase include:
1. Design Iterations Phase
A key focus area in modern construction is aesthetics. Investors want buildings that are unique and eye-catching. Before such is achieved, a lot of time and effort goes into coming up with the design concept and actually putting it down on paper in a format that architects and contractors can use.
For this, there can be pre-construction meetings between the building owners or their representatives and the design time. The initial meeting will focus on getting ideas from the investors of what they would like the building to look like. With this information, the design team may also offer suggestions in line with those ideas.
From there, there will be subsequent design iteration meetings where the design team presents designs for review and approval. Other activities that take place during the design iteration phase include:
- Setting check timelines
- Discussing project challenges
- Value engineering
Value engineering is especially important as it allows you to deliver desired project outcomes at the lowest cost possible. It involves identifying areas where materials can be substituted with lower-cost ones without compromising functionality.
2. Project Budget Meetings
Whereas budgetary discussions are a key feature during design iteration meetings, not all matters can be adequately addressed. This is why it is crucial to schedule periodic pre-construction meetings specifically to address budgetary changes. These meetings include the owner or their representatives, the design team, and the construction company.
Any time there is a design change or adjustment, it will have an impact on material needs and costs. Therefore, budget meetings should be scheduled after key design iteration meetings. Discussions are centered on how each adjustment or challenge identified will impact the cost of the project. The teams responsible for value engineering will also provide feedback on proposals that will help keep the costs in line with the original budget.
Another crucial aspect of budgetary meetings is to ensure that agreements with financial lenders and project reimbursements are intact and continuously funded. It is recommended to have at least three budgetary meetings, at the beginning, middle, and towards completion of the pre-construction phase.
3. General Contractor Interview and Selection Meetings
General contractor interview and selection meetings are organized to ensure that the best contractor in terms of quality and pricing is brought on board. Such meetings can be grouped into different stages:
Invitation to Bid
Once the project’s scope of work has been determined, the next step involves getting the right teams to bring it to life. This begins by creating a list of pre-qualified general contractors who are invited to bid on the project. In such meetings, the contractors present their bids for review by the construction manager.
There will then be a subsequent meeting where they will present other bids in response to requests from the construction manager and based on their findings from site visits.
Final Budget Review
At this stage, the bids from the closest bidders are reviewed, and the construction manager makes the final recommendation for the general contractor.
4. Contract Drafting Meeting
After all the project specifications have been ironed out and a suitable general contractor identified, there will be a meeting to formalize such agreements. With the support of an attorney, contracts will be drafted, outlining each party’s role and desirable outcomes. Other matters that are discussed during such meetings also include:
- Possible challenges
- Logistics
- City/agency-specific regulations and constraints
How Will a Pre-Construction Meeting Benefit Your Project?
During construction, many challenges will arise. Any disruptions or issues that arise can significantly affect the project’s success. Whereas some challenges are only evident once they occur, some are foreseeable, thus manageable. Pre-construction meetings allow you to mitigate such risks by:
- Allowing you to determine the best approach for completing the project successfully
- Ensuring all parties are aware of their role and how it impacts the entire project
- Giving construction teams the ideal platform to review all the documents needed by the federal, state, and city government
- Setting project objectives and timelines for completion
- Allowing project owners to express their vision and expectations of the project
- Determining how decisions will be handled as a clear chain of command will be established
Managing Risks
As the construction industry continues to shake off the effects of COVID-19, there are arguably more risks than ever. Along with a labor shortage, raw materials such as steel are now scarce and prices highly volatile. Such uncertainty, along with other challenges, make commercial construction even riskier. This is why it is essential to take a proactive approach towards managing potential risks.
At Build Analysis, we specialize in pre-construction analytics to help you identify possible risks before commencing a project. Our team of construction experts and cost managers have years of experience. Contact us today to gain insight into the possible challenges that may arise during the project and how to mitigate them.
