“Less is more. We all know the saying. It has been transformed into a platitude by advertisers and TV shows and even corporate America as it right-sizes people out of their livelihoods (“We’ll have to learn to do more with less around here.”). But is less really more? And if so, is the opposite true? Is more actually less?”(1)
How can this question be related to construction? Obviously when thinking of your upcoming construction project, the first thought that comes to mind is “more is more and less is less.” The more money that is budgeted leads to more quality upgrades, more square footage, more luxuries, etc. that can be incorporated into the project, and vice versa related to less money. If you could have more with less money, would you?
If your answer is yes (and I am hoping you would say yes), then let’s consider your project’s delivery method. Traditional construction (less contractors) vs. multiple prime construction (more contractors).
With the traditional method there will typically be one, to possibly four contractors (General, Plumbing, HVAC and Electrical Contractors), in which the General Contractor (GC) is the lead contractor in charge of coordination, scheduling, and safety. So what does this mean to the owner? The GC will have a multitude of sub-contractors under their control to complete the specialty work required on the project. These sub-contractors are hired and paid directly by the GC, taking all control away from the owner. In a process called the ‘shopping process,’ the GC often times negotiates with their sub-contractors after they are awarded their contract. This causes possible delays to the submittal process and overall project schedule. Yes, the owner will have one main point of contact amongst the contractors, but they are also ‘putting all their eggs in one basket.’
Can this work? The answer is yes. There are many well-known and trusted general contractors out there. However, in the public project, low-bidding process, they are often hard to find. This places the projects future and outcome to the ‘luck of the draw’ or ‘flip of the coin’ as to what GC is awarded the contract on bid day, which creates more risk and higher costs for the owner. Therefore, ‘less is more.’
Multiple Prime Approach:
In the multiple prime approach, the role of the GC is dramatically reduced by transferring the project control to the owner or a professionally qualified Construction Management Service Company hired by the owner. With multiple prime, each of the specialty contractors are designated as a prime contractor and bids directly to the owner for the different scopes of work. This in return reduces the overhead and profit that the GC adds to their sub-contractors’ prices. When utilizing this approach, a cost savings of 3-5% can be achieved on bid day, often times offsetting the cost of a professional construction manager (CM). In addition, multiple prime allows the owner or CM to oversee the schedule and hold the prime contractors accountable if they are not performing as required by the specifications. This provides the project with a better opportunity to remain on schedule and finish on time. The project quality will also increase due to the fact that the prime contractors now must provide bonding to complete the specialty work incorporated in their scope of work.
As previously noted, a professional Construction Management Service Company is selected by the owner based on previous experience and performance on projects, not solely on the low-bid process. Utilizing a construction management service with the multiple prime approach creates less of a chance of schedule over run and lowers costs on bid day. Therefore, ‘more is less.’
Many assume the use of multiple prime construction will create more confusion on projects and heighten the chance of disputes related to scopes of work. However if properly executed by a qualified and experienced firm, significant cost savings can be achieved, the construction schedule can be met or expedited, and the overall quality of the project is improved.
So, again let’s ask the question, “Would you want more for less if you could?” If so, please contact FPCM to discuss our signature multiple prime approach and how we can save you money on your next project.
*Article written by Construction Management Specialist, Jeff Angstadt.
(1) Millburn, Joshua F., and Ryan Nicodemus. “More Is Less? | The Minimalists.”The Minimalists. N.p., 16 June 2012. Web. 23 Apr. 2015.