Office relocation projects provide exciting options… it’s an chance to provide the optimum business environment to attain peak overall performance and improve profitability.
Moving your workplace is among the largest investments your business can make. Handful of today’s organisations have the knowledge, time or resources on hand to manage this task effectively. There is absolutely no doubt that getting into such a task is a serious business, that could have significant financial and non financial implications to your business if not managed effectively.
A recent independent survey showed that 90% of companies overspent on the office relocation and fit out task. A number of these overspent by more than 20%.
The main reasons for this were lack of clarity in the original project brief.
Design detail incomplete when appointing a design and suit out contractor under agreement.
Struggling to retain control over the task costs through lack of experience and internal resource.
At the start of any task a client will be concerned about budget. Whether you are spending 50,000 or 500,000 you need the same things – good design, quality build, delivered on time and most importantly you want the task within the budget you set.
Will buying independent project administration and therefore having to pay management fees be considered a good use of your cash?
Or should you hand the task over to a design and suit out contractor who’ll provide you an individual point of contact throughout the project?
Design & Match Out Contractor:
It must be recognised that the design and fit out group will be used by the same business who understandably want to maximise their revenue on your own project. Designs will influence task costs and the design resource depends on a percentage of overall agreement costs as will the task management costs. These companies are slick in their approach and intensely clever with smoke cigarettes and mirrors.
Percentage tag up between 30% and 45% on contract suit out costs. Variation costs under the build contract could be higher.
Unless you have internal experience to manage this type of contractor how do you want to know in case you are getting affordability throughout the project programme and costs are controlled in order to avoid surprises at last account?
Changes to any task are inevitable – some can be your choice plus some unavoidable changes. Any variation works discovered during the agreement build period will incur costs hard to quantify against the original scope of works made by the suit out contractor – unit costs, earnings and overheads are mixed within the plan of costs.
This approach to managing a project has its place clearly, specifically when short project timeframes restrict the chance to define the design detail and go to the market for tender. If this is actually the case consider appointing on a fixed fee contract a professional QS / Project Supervisor to monitor price for you. You will more than recover the costs against the price savings.
Project Management Consultant: An alternative solution approach if you begin to plan assembling your project early enough is usually to appoint your very own professional management team in a fixed charge basis to oversee and value engineer the design process and manage your relocation task.
Once appointed the very first thing your task manager can do is use the selected designer as well as your internal managers to obtain a detailed short and knowledge of your organisation, how you work now and the possibilities for changing or enhancing functioning practices within the new office environment.
A realistic budget at the beginning of the project is critical. An accurate budget will develop as the space plans and styles are detailed as well as your project manager will also build in the correct amount of contingency funding, the “imagine if….” part of your budget. Remember ‘change occurs in projects’ it’s how you manage changes that’ll be critical.
All fit out projects have risks – prior to the task starts some dangers will be known, some unknown. Part of what you’re paying task management costs for is risk administration – your project supervisor will understand how much of a percentage to build into your budget (5% is general).
Designs will end up being agreed in detail and signed of by you your client prior to your final schedule of costs being prepared for tender packages.
A tender package of documents will be prepared by your project supervisor. A tender package predicated on detail styles and schedule of functions means that each contractor could have the same details to price. Contractors will be required to break down each element of their price – this means that you’ll get like for like prices and can iron out any potential financial surprises sooner instead of later.
An agreed overhead and revenue (OHP) between 5 and 15% dependent on the task size and scope can be declared.
Price variants between contractors can come across thousands. In case you are self-confident that everything that needs to be priced has been and contractors have already been reference checked for financial balance and quality of work, the cost of your project administration fees will be more than included in the savings which can be made at this tender stage.
Once a primary contractor has been selected the right professional JCT agreement will be prepared by your project supervisor that ensures you as well as your contractor is fully protected.
You project supervisor will need responsibility for managing any changes within the construction program. Changes within specifications will be handled against the agreed unit costs and unique declared revenue and overheads. It isn’t an opportunity for the contractor to overcharge or increase profits.
Final accounting at the end of the project will identify most agreed variations and any kind of savings made through the contract period. That is the opportunity for your project supervisor to demonstrate the value of his charge, the price savings made through the program and ensuring that you retain a practical percentage of the full total costs within the agreed agreement defect period.