4 Must Haves on Every Project

You are considering opening a new business, or you have decided to remodel your current business in hope of bringing in new clients or customers. You hear terms such as “project estimate”, “qualifications and exclusions”, “construction timeline”, and similar terms, but you are confused as to what exactly these terms mean. This article will shed light on those terms so you know what information?you need about your construction project before you choose that contractor and move forward on your project.

There are four key pieces of information you need to budget your project, determine when payments may be due to your contractor, and how long it will be until your business can open, or reopen.

#1 Project Cost

The first, and really the most obvious, piece of information you need is the project cost estimate, often called a bid. Usually, this bid will have a line item breakdown of costs for material and labor for electrical, mechanical,?plumbing and finishes for your project. Sometimes this will include equipment costs, but more often than not, the estimate will exclude equipment and furniture. If the estimate is based on plans for the project, it will usually include the project cost per those plans. If site conditions prove to be different, or if unknown issues are found when walls are opened, the price will change.

#2 Qualifications and Exclusions

This brings us to the qualifications and exclusions list for the estimate. Most bids will include a list of conditions applicable to that estimate which sets the scope of what tasks the contractor is willing to perform for the price stated. This “qualifications and exclusions” list will usually exclude any work not in the plans and specifications for the project, changes required by a mall or inspector, mold and other toxic issues found on the site, surprise conditions uncovered when walls are opened or materials on site are removed, and changes requested by the client after the estimate is submitted. It is important that you, as the client, review this list carefully, ask questions about anything you do not understand, and if there is an item on the list you do not want excluded, you talk to your contractor about that item and the price to include that work.

?Construction will have surprises at some point as a project rarely runs completely perfectly from start to finish. Planning for typical occurrences can reduce those surprises and the conflicts which arise when the expectations of the client differ from the intent of the contractor when the estimate was submitted.

#3 Schedule

The price stated in the bid is based on the work taking a specific amount of time. Look and see if the project schedule is based on calendar or business days. These are quite different as business days are Monday through Friday and exclude holidays. A schedule based on calendar days is calculated on a Sunday through Saturday workweek with work continuing on holidays.

It is important to understand the work schedule for the project based on the location. Some malls allow construction work to be performed only when the mall is not open. Some office buildings restrict the type of work which can be performed during normal work hours so other tenants are not disturbed. To ensure your expectations as to when construction will take place is realistic, and on par with the contractor, obtain this project calendar projection before you choose the contractor and agree to a price, so you can speak to your landlord about when construction can occur, and to confirm with your contractor that the price is based on those work hours.

?#4 Inspections

So now you have the estimate, the list of qualifications and exclusions, and the project schedule. The final piece of information you need from the contractor, or as part of your project estimate documents so you can choose a contractor and sign a project contract, is the list of inspections for your project and at what point those inspections need to occur. Every commercial construction project will have a contract term as to when progress payments will be owed to the contract. Usually, payments are tied to project milestones, such as when a particular inspection is passed, when a certificate of occupancy is issued, and the punch list is completed. If you know in advance when payments will be expected by your contractor, you can budget the project costs and keep track of what to expect as the project moves forward.

A tenant improvement project is about 65% of the cost of opening a new business. Knowing what the estimate means, what is included and what is not included in the price submitted, how long the project should take absent changes made to the plans or project requirements, and when to expect to make payments to the contractor and subcontractors, will allow you a strong start on your new tenant improvement project