Another activity area that the Trade-off Triangle does not address fully is the construction phase choices and decisions.  These are the seemingly ad hoc but potentially consequential choices made about construction timing, scheduling and contingencies that will impact the project budget.

With respect to timing, once the construction plans are completed the understandable desire is to break ground as soon as possible.  However, seasonal timing can have a big impact on cost.  In the Northeast, outdoor construction during the winter months has higher costs for two reasons; worker productivity and weather delays.  I have experienced first hand the worker productivity decline in winter.  With shorter daylight hours, the work day begins later and ends earlier.  The bone chilling cold requires additional breaks to recover.  And, the fact is, working in cold weather tires you out sooner since more of your energy gets invested in keeping your body warm.  I’ve seen estimates of seasonal productivity declines of 20-to-30 percent.  That is to say, if a contractor is developing a budget to frame and enclose a house in the winter months, he should increase his labor costs for those activities by approximately 25% to account for the productivity declines.

The other seasonal factor is weather and related delays.  Construction sites are potentially dangerous locations where a coating of snow and ice can shut down a job or slow down progress.  These schedule delays will add to the carrying costs of the construction project.

The desire to get the project underway and completed can also tempt a homeowner to push the contractor to deliver the house on an accelerated time schedule.  Here the old maxim comes to mind: “good, fast, cheap – pick two!”  In other words if you want a good project done fast, it isn’t going to be cheap.  In lower Fairfield County, where people build large, elaborate and expensive homes, projects can easily run two or more years to completion.  One contractor has carved out a niche in delivering complex, high quality homes on an accelerated schedule.  Needless to say, he gets a price premium for performing this feat.

Finally, the other construction phase choices that impact budget and that are not addressed by the Trade-off Triangle are the decisions around contingencies and change orders.  Budgets anticipate contingencies by creating a reserve for that purpose and if all goes well, that sum should be adequate to cover surprises.  The risk and reserve level increases in major renovation projects, although a careful building inspection during the planning stage should minimize surprises.  Occasionally budget-breaking problems arise and, unfortunately, they usually do not have a lot of decision-making latitude to resolve (such as discovering ledge at the excavation site.)  The homeowner must come up with additional budget dollars for the project to proceed and should be realistic when entering into a large project by maintaining a cash reserve for unexpected contingencies.

Change orders are one of the most stressful elements in managing a good client relationship during construction.  Many builders look at change orders as a welcomed addition to revenues and profits and will typically charge the hapless, boxed-in homeowner a price premium for undertaking the work.  Timberdale resists this type of behavior and typically prices change orders consistent with the overhead and profit targets used for the project overall.  We believe that the client relationship management benefits outstrip any added profit we might squeeze out of the additional work.  Also, we take some culpability in change orders.  We ask the question, “was this something we should have done a better job anticipating on the client’s behalf during the design and planning stages?”  Sometimes the answer is yes and we shouldn’t be rewarded excessively for those short comings.