The Bonita Springs (Fla.) High School will cost $14 million more than its original $50 million to complete. Rising costs of construction materials and labor are driving this overrun.
New York City’s School Construction Authority is over budget on more than half of its current projects by an aggregate of at least $300 million, including the construction of an annex to Public School 303 in Queens whose costs have nearly doubled to $98.6 million, from its initial budget of $53.9 million.
And this problem doesn’t just plague school districts, either. Construction costs comprise between 60% and 85% for commercial developments, and through the first half of this year those costs are up nationally by 5.7%, according to JLL. A number of studies, including one by McKinsey & Company last year, confirm that cost and schedule overruns have become the norm for the construction sector, jacking up the final price tags on projects, in some cases exponentially.
McKinsey noted that construction is among the least digitized of the 22 sectors it tracks. At the very least, there’s room in the construction sector for significant improvement in how costs are forecasted and project spending is managed.
Rider Levett Bucknall (RLB), a global consultant that specializes in cost and project management and quantity surveying, has recently developed a platform called Pulse that the firm claims is among the first to focus on the financial management of a project.
“A typical project will have anywhere from three to 100 contracts, with many potential changes,” explains Paul Brussow, RLB’s Executive Vice President. “This program allows [clients] to get to the bottom line of what a project is really going to cost.” By evaluating and calculating all costs—from engineering to legal—Brussow says Pulse can helps managers spot project risks sooner, and give them more information and time to devise contingencies.
Pulse complements RLB’s Ross 5D measurement and bill production software.
RLB will launch Pulse in November as an in-house service to its clients. It has already tested it on some projects (which Brussow declined to identify), and has started training employees in North America how to use it. The company will expand that training to other countries in the coming months.
“There’s a lot of interest within the company to deploy this software,” he says.
By the end of this year, says Brussow, Pulse should be able to manage a project’s cash flow and provide participating vendors with invoice management.
Related Stories
Projects | Mar 12, 2019
Disney announces opening dates for Star Wars-themed parks
Star Wars: Galaxy’s Edge is the first Disney park to integrate the Play Disney Parks mobile app for greater immersion.
Contractors | Nov 13, 2017
CBRE completes acquisition of Heery International
The deal is expected to expand the real-estate firm’s project management capacities in several U.S. sectors.
Architects | Oct 31, 2017
AIA selects recipients for the 2017 Innovation Awards
The program honors projects that highlight collaboration between design and construction teams to create better process efficiencies and overall costs savings.
Projects | Apr 17, 2017
BD+C's 2017 Design Innovation Report
Façades that would make Dr. Seuss smile, living walls, and exterior wall space that doubles as gallery space are all represented in this year's BD+C Design Innovation Report.
Projects | Jan 25, 2017
Trump prioritizes infrastructure projects, as rebuilding America is now a hot political potato
Both parties are talking about $1 trillion in spending over the next decade. How projects will be funded, though, remains unresolved.
Projects | Jul 29, 2016
From Construction Site to Court Room: How project management is transforming expert witness teams
Applying goal-oriented methodologies and techniques can increase efficiency and reduce costs associated with litigation.
Projects | Aug 21, 2015
Panama Canal expansion nearing completion
An April 2016 opening is scheduled, which will allow bigger-capacity ships to traverse between the Atlantic and Pacific oceans.
Mixed-Use | Jul 22, 2015
Despite China's 'ghost cities,' the country continues construction boom
Cities continue to spring up in the heart of China. Designed to accommodate millions, many are still nearly empty.
Sponsored | Cladding and Facade Systems | Mar 24, 2015
Designers turn a struggling mall into a hub of learning and recreation
Architects help Nashville government transform a struggling mall into a new community space.
Museums | Mar 5, 2015
A giant, silver loop in Dubai will house the Museum of the Future
The Sheikh of Dubai hopes the $136 million museum will serve as an incubator for ideas and real designs—a global destination for inventors and entrepreneurs.