The decision as to who will manage and how the building project will be managed is a critical one – there are clearly a number of choices that as the property owner you can make but ias we will see, independent project management is a option that should be carefully considered.
At the start of any build you will rightly be concerned about getting the right team for your build. You will want you want a quality build, delivered on time and within the budget that you set.
A recent independent survey commissioned by ClearPlan of homeowners who had completed builds in South Bucks and Herts in the last 18 months showed that 90% of people overspent on their home renovations, the average overspend was 20%. Of homeowners responding:-
50% – managed the build themselves
38% – build managed by the builder
9% – build managed by the architect or designer
It would seem that the usual methods of managing a build had not really delivered for the home owner.
The question is will investing in a building project manager and therefore having to pay project management fees be a good use of your money and what are the differences between this route and using the architect or builder to project manage?
Independence :
The function of a project manager is to be a more technically experienced version of the client, so you but with many years of construction engineering experience. The building project manager is the only part of the design and build team who is truly independent of the process, whose sole priority is your requirements. ClearPlan see our role as building project managers as:
- to protect client interests (both aspirational in terms of build and financial in terms of budget control)
- ensure that clients have all of the information that they need to make good decisions in what is a complex build environment
- to have the technical knowledge to challenge either the designer or builder should the client feel that they are being channelled down a path at variance from their original requirements
ClearPlan work with a wide variety of architects and designers – their reason for partnering with us is to preserve independence in the process and their lack of time to be able to commit to the site management, which is so crucial once in build.
Some also feel that there is an inherent conflict of interest between their role as architect and Contract Administrator.
The main architectural function is one of design – practices are established with this as their main service offering. Project management can be done and is offered by many but it is secondary to design work. The co-ordination requirements of a project are many and some designers find that they do not always have the time for this critical function if design work is outstanding.
The main function of the builder is to build in the most time and cost effective manner for their firm. At different stages of the build a client will be asked to make technical decisions – they might be offered option A or option B. However, there might also be options C, D and E available. If they do not have sufficient technical knowledge about the build process, they will not be aware that other choices might be possible or even to ask the question about alternatives.
Additionally, builders may not communicate the future implications of decisions client’s make sufficiently well for them to see the whole picture. This is not done deliberately but what may be an obvious “consequence” to a builder with years of experience is not always clear to the client with very limited experience. All decisions made will have knock on implications further in the project. Clients might find that ill informed decisions made early on in the process restrict their future choices.
The ClearPlan role in this case is fully appraise the client of the “bigger picture” so that they make decisions based on clear information. To a certain extent our job is also translating “builder speak” into plain English so that clients understand exactly what they are being asked to decide.
A major homeowner benefit of having the building project management function separate to the architect / builder function is the daily management of the project. There will be decisions to make and changes along the course of the project. ClearPlan projects are run such that changes are noted, costed and agreed as they occur – this ensures that there are no issues with bills for “extras” which have not been clearly agreed at the end of the job. With so many activities happening all at once, if change is not rigorously documented the budget can easily start to slip.
Cost:
Using a project manager will save a client money. At ClearPlan, we look for the cost of our fees to be covered by the savings that are made through a strong procurement process.
Many architects define “project management” as management of one main builder. They are unlikely to want to manage a variety of different suppliers.
However, a more cost effective way for a project to be set up may be to buy high cost items (such as glazing, kitchen, bathrooms etc) directly from suppliers. In this case, ClearPlan would help the client source and price those items and therefore our function is to manage those varied parties in terms of supply, delivery, cost etc.
Creating more “packages” in the build does produce dramatic cost savings but those parties all need to be managed.
A building project management company will manage those varied relationships, an architectural practice may not. If the builder is willing to manage those parties, he will almost certainly charge a fee which is generally about 10% of the purchase cost of the items. At ClearPlan we cost projects on a fixed hourly rate fee for management time not a percentage of the home owner spend – our job is to save money and manage the budget. Removing some of the purchasing from a builder often saves the client thousands of pounds.
When considering using either the architect or builder to project manage, it is essential to get clarity on their cost for doing so and what services are provided for that fee.
As a general rule architectural practices will charge between 8 – 12% of build cost for design fees and may do the same for PM fees. Builders who fulfil the PM function charge 10% of build cost (plus other high cost purchase items). ClearPlan fees are in the region of 5% of build cost – we provide a fixed fee proposal once the client has a finalised design. This will not change unless the client elects to make significant changes to the design which impacts on the time that we are managing the project.
Time:
In addition to cost, the function of a building project manager is to save time in the build process – in some projects, there will be a period of time in which the client will not be able to live in the property as it will have been demolished. To minimise the amount of time that they potentially have to stay in rented accommodation, a robust project programme is essential so that everyone knows who is doing what, when and that activities can run simultaneously to prevent the project from coming to a halt.
Central to the project management function is “enabling” – the ClearPlan role is to provide support that allows the designer and builder to fulfil their core functions whilst taking away many of the “detail” activities that are critical to allow the progress of the build. These details can be easily overlooked but can be extremely detrimental to the progress of the build if not managed effectively and in a timely manner.
Choosing the correct build team is critical to the success of your building project – before making any final decisions do get a number of different parties to quote for the building project management. It could be the best decision you ever make.
